Construction Industry VAT reverse charge
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.
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.