Land and buildings ― building work ― reverse charge

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note provides information relating to the reverse charge procedure for accounting for VAT on building work.

Commentary regarding the legislation is provided in De Voil Indirect Tax Service V3.234.

What is the reverse charge and when does it apply to building work?

The reverse charge is a procedure whereby the recipient of a supply, rather than the supplier, is required to account for the VAT due on the supply.

A reverse charge applies to most building work and other specified services subject to VAT at a rate other than the zero rate and supplied to a business at a location in the UK if at least one of the following conditions are met:

•
the supplier belongs in a country other than the UK and the recipient of the supply belongs in the UK and is registered for VAT
•
the supplier and the recipient of the supply are registered for VAT and the service is reported within the construction industry scheme (CIS)

VATA 1994, ss

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