Readers’ forum: Reverse charge problem for builder

We are a firm of building contractors and have made a mistake with the new reverse charge rules in relation to invoices received from one of our subcontractors. We are not sure how to deal with the problem.

The subcontractor has charged us 20% VAT on all invoices issued since 1 March 2021 when the new rules were introduced and we now realise that they should have been invoiced without VAT (ie the reverse charge applies and we account for the VAT instead).

This is because we sell on the services as part of our own invoices issued to the final client and we are also registered for the construction industry scheme.

It seems that the contract with the subcontractor means we should have told him if we are not an ‘end user’ for any job. As we did not do this the subcontractor has charged 20% VAT as...