Construction Industry VAT reverse charge

  • Construction Industry VAT reverse charge 1

The CIS VAT domestic reverse charge measure will apply to supplies of construction work from 1 March 2021. The measure was due to commence in October 2019 and has been delayed twice due to Brexit and the Coronavirus.

Key conditions:

Apply the reverse charge when all the following are met:

  • The supply for VAT consists of construction services and materials.
  • It is made at a standard or reduced rate of VAT.
  • Between a UK VAT registered supplier and UK VAT registered customer.
  • Supplier and customer are registered for CIS.
  • The customer intends to make an ongoing supply of construction services to another party.
  • The supplier and customer are not connected.

The CIS reverse charge does not apply to any of the following supplies:

  • Supplies of VAT exempt building and construction services.
  • Supplies that are not covered by the CIS, unless linked to such a supply.
  • Supplies of staff or workers.

The CIS reverse charge does not apply to taxable supplies made to the following customers:

  • A non-VAT registered customer.
  • 'End Users' i.e. a VAT registered customer who is not intending to make further on-going supplies of construction.
  • 'Intermediary suppliers' who are connected e.g. a landlord and his tenant or two companies in the same group.