Guidance on the workings of the domestic reverse charge (referred to as the reverse charge) has been published by HMRC. The reverse charge will affect certain specified supplies of building and construction services supplied at the standard or reduced rates that are reported under the Construction Industry Scheme (CIS). This will place the onus for dealing with the VAT charge due on subcontractors’ bills to the main contractor. 

Affected construction or building businesses should:

• make sure their accounting systems and software can deal with the reverse charge

• consider whether the change will impact their cash flow

• make sure all their staff who are responsible for VAT accounting are familiar with the reverse charge and how it will work.

If you feel your business will be affected by this and would like more information please get in touch