If your a business classified as in the Construction Industry and registered for VAT and CIS then the way you charge and process your VAT is changing from 1 March 2021.
VAT Reverse Charge rules effective from 1 March 2021
You must use the reverse charge from 1 March 2021, if you’re VAT registered in the UK, supply building and construction industry services and:
- your customer is registered for VAT in the UK
- payment for the supply is reported within the Construction Industry Scheme (CIS)
- the services you supply are standard or reduced rated
- you’re not an employment business supplying either staff or workers, or both
- your customer has not given written confirmation that they are an end user or intermediary supplier
What you’ll need to do
- Check if your customer has a valid VAT number.
- Check your customer’s CIS registration.
- Review your contracts to decide if the reverse charge will apply, and tell your customers.
- Ask your customer to confirm whether they are an end user or intermediary supplier.
- Find out how to record the reverse charge in your accounts.
How to check your customer’s Construction Industry Scheme registration
Use the Construction Industry Scheme online service to check your customer’s registration.
Customers who are contractors for CIS purposes may not show up on such checks. If so, unless they tell you they are end users or intermediary suppliers, ask them to confirm that they are reporting under CIS before applying the reverse charge.
You’ll need the following customer details to complete the check.
- unique taxpayer reference
- National Insurance number
Partner in a firm:
- firm’s name
- partner’s name
- firm’s unique taxpayer reference
- partner’s unique taxpayer reference, or National Insurance number – if the partner is an individual
- company’s unique taxpayer reference or registration number – if the partner is a company
- name of company
- company’s unique taxpayer reference
- company registration number
If you would like further information on how this will effect your business please contact us and we would be pleased to assist and advise.