Reverse Charge VAT Guidance

February 18, 2021

From 1 March 2021 the domestic VAT reverse charge must be used for most supplies of building and construction services.

The charge applies to standard and reduced-rate VAT services:

  • for individuals or businesses who are registered for VAT in the UK
  • reported within the Construction Industry Scheme

You’ll need to:

  • make sure your accounting systems and software can deal with the reverse charge
  • consider whether the change will impact your cash flow
  • make sure all your staff who are responsible for VAT accounting are familiar with the reverse charge and how it will work

The following information and guidance has been produced to support employers:

  1. Reverse Charge Guidance Booklet (click here)
  2. Template letter to use with your customers (click here)
  3. Template letter to use with your sub-contractors (click here)
  4. Cash Flow Calculator (click here)
  5. Presentation for CECA by Liz Bridge, tax expert (click here)
  6. HMRC VAT-registered construction businesses Webinar (click here)
  7. Reverse Charge VAT FAQs (click here)

If you are or think you will experience cash flow issues then you should contact the HMRC Business Support Service on 0300 200 3835.

Should you require any additional assistance please contact our Membership Team on 0131 556 0600.

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