Construction Domestic Reverse Charge: Completing a VAT Return
The way HMRC collects VAT from construction firms has changed.
On 1 March 2021, the VAT reverse charge for building and construction services came into force. The aim is to tackle VAT fraud in the construction industry, specifically missing trader fraud, by making it the responsibility of the contractor or receiving sub-contractor to account to HMRC for VAT on applicable transactions.
In other words, a contractor no longer pays VAT over to their sub-contractor and instead accounts for it directly to HMRC via their own VAT Return. Its application is closely linked to the Construction Industry Scheme (CIS), which was introduced just over 20 years ago.
In this e-book by Sage we take a look at the accounting implications for getting the domestic reverse charge correct, with a special regard to completing VAT Returns. We also look at how compliant VAT Returns can be submitted using Sage Business Cloud Accounting.
Download this e-book to learn more.