VAT & Domestic Reverse Charge
The construction VAT reverse charge trips up even experienced contractors. We make sure your invoicing and returns get it right, every time.
The construction VAT reverse charge trips up even experienced contractors. We make sure your invoicing and returns get it right, every time.
Contractors and subcontractors who need reverse charge invoicing set up correctly from the start, and VAT returns that actually reflect it, rather than a standard invoice template that quietly gets it wrong. Equally useful if you're VAT registering for the first time and want the scheme choice explained properly rather than guessed at.
Not sure whether a particular job should be reverse charged? Our guide to the VAT domestic reverse charge walks through who it applies to and what it changes on your invoices.
We check whether each job actually falls inside the reverse charge before you invoice, since not every construction service does, and getting it wrong in either direction causes real problems. We set up your invoice templates and bookkeeping software so reverse-charged jobs are flagged and coded correctly from the start, rather than corrected retrospectively. Each quarter we prepare and file your VAT return with the reverse charge entries reconciled against your sales and purchase records. If you're approaching the VAT registration threshold, we tell you ahead of time and talk through which scheme actually suits how your business works, not just the default option.
Book a free discovery call and we'll check your invoicing and VAT setup are correct.
No. It only applies to supplies between VAT-registered contractors and subcontractors within the Construction Industry Scheme, where the customer isn't the end user. Work for a private homeowner, or for the final business at the top of the chain, is invoiced normally with VAT charged as usual.
Charging VAT when you shouldn't, or not charging it when you should, can mean HMRC assessments, corrected invoices being chased after the fact, and cash flow problems if you've already spent VAT you weren't entitled to keep. We check every invoice template and job type before it goes live, not after a return's been filed.
It depends on turnover, how much you spend on materials versus labour, and whether reverse charge sales apply. Standard accounting suits most contractors doing reverse charge work; the Flat Rate Scheme is rarely worth it once reverse charge sales are involved. We work through the options with you at registration, not after you're locked into one.