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Reverse charge – take three
Key points
- Reverse charge applies only to building work subject to 5% or 20% VAT.
- The builder receiving construction services must tell builders if they are the end user or intermediary supplier.
- Builders receiving supplies must ensure they do not pay VAT when the reverse charge applies.
- The supply of labour and materials is classed as a single supply for the reverse charge.
- It is likely to be beneficial for builders in the flat rate scheme to leave it.
Writing this article is like being the best man preparing to give his speech at a celebrity’s third wedding: how can I make my words different to the previous two events? The reverse charge rules for the construction industry will be introduced on 1 March 2021 a case of third time lucky after justified delays by HMRC in both October 2019 and the same month in 2020. I have written articles...
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