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VAT Reverse Charge Checker for Construction

Answer one question with confidence: do I charge VAT on this construction job, or does the domestic reverse charge apply? Set whether you and your customer are VAT registered, whether the customer is CIS registered, whether the work is within CIS scope, and whether the customer is the end user, then enter the net amount and VAT rate. The tool returns a clear verdict, the VAT to charge (zero under the reverse charge), the total invoice, and exactly what your invoice must say. Based on HMRC guidance in force since 1 March 2021.

Your job

The reverse charge only applies between VAT-registered businesses.

The customer must report the supply under the Construction Industry Scheme.

Professional services such as architecture or surveying on their own are outside CIS.

If they are the end user, you charge VAT normally. End users must tell you so in writing.

£

The value of the work before VAT.

Standard 20%, reduced 5%, or zero-rated 0%.

End-user exception: even between VAT and CIS-registered businesses, the reverse charge does NOT apply when your customer is the end user or an intermediary supplier and tells you so in writing. In that case you charge VAT normally.
Do you charge VAT?
VerdictReverse charge appliesDo NOT charge VAT. Your customer accounts for the VAT to HMRC.
Net amount£5,000
VAT you charge£0
Total invoice£5,000
Your invoice mustState the reverse charge

When the reverse charge applies you do not add VAT to the amount you charge. Your invoice must clearly state that the reverse charge applies and that the customer is to account for the VAT, for example “Reverse charge: customer to account for VAT to HMRC” or “VAT Act 1994 Section 55A applies”, and show the VAT rate or VAT amount the customer must account for (without adding it to the total). Verify on gov.uk.

How it works

The single most common VAT question in the trades since March 2021 is deceptively simple: do I charge VAT on this construction job, or does the reverse charge apply? Get it wrong and you either invoice VAT you should not have, or fail to flag a reverse charge your customer needs to account for. Both cause friction, corrections and awkward conversations with HMRC.

This checker answers that question in one screen. Set the five conditions, enter the net amount and the VAT rate, and you get a clear verdict, the VAT to charge, the total invoice, and exactly what your invoice must say.

What the reverse charge actually is

The VAT domestic reverse charge for building and construction services came into force on 1 March 2021. It changes who pays the VAT to HMRC. Normally you, the supplier, add VAT to your invoice and pay it over. Under the reverse charge you do not add VAT: your customer accounts for it on their own VAT return instead. It was introduced to stop missing-trader fraud, where a supplier charged VAT and then disappeared without paying it.

Crucially, the reverse charge does not change how much VAT is ultimately due. It changes who hands it to HMRC. For you the practical effect is a job invoiced with no VAT added, plus a clear statement on the invoice that the customer is responsible for the VAT.

When it applies

The reverse charge applies to a supply only when all of the following are true:

  • You and your customer are both VAT registered.
  • The supply is reported under CIS (the Construction Industry Scheme).
  • The work is a construction service within CIS scope, not purely architecture or surveying on its own.
  • Your customer is not the end user (and not an intermediary supplier connected to one).
  • The supply is standard-rated (20%) or reduced-rated (5%).

If even one of these fails, you charge VAT in the normal way. That is the logic the tool runs: flip any condition and watch the verdict change.

The end-user exception

This is where most mistakes happen. Even between two VAT and CIS-registered businesses, the reverse charge does not apply when your customer is the end user, the business that will use the building itself rather than sell the construction service on. A property developer having its own premises refurbished is an end user. A homeowner is always an end user (and not VAT registered), so work for a homeowner is always normal VAT.

End users, and intermediary suppliers connected to them, must tell you in writing that they are end users. Once they have, you charge VAT normally and you do not need to keep checking their status on every job.

What your invoice must say

When the reverse charge applies, your invoice must make two things obvious: that the reverse charge applies, and that the customer must account for the VAT. HMRC accepts wording such as:

  • "Reverse charge: customer to account for VAT to HMRC"
  • "VAT Act 1994 Section 55A applies"
  • "S55A VATA 94 applies"

You must also show the VAT rate or the amount of VAT due under the reverse charge, but you do not add that VAT to the total the customer pays you. The tool tells you, for the job you have entered, whether your invoice should state the reverse charge or show VAT as usual.

What to do with the verdict

If the verdict is "reverse charge applies", invoice with no VAT and add the statement above. If it is "charge VAT normally", add VAT at the rate shown and account for it as usual. When CIS deductions are also in play on the same job, work out the labour deduction with the CIS tax deduction calculator, and when you are ready to bill, the VAT-compliant invoice generator produces an invoice with the correct reverse-charge wording.

To systematise quoting, invoicing and cash flow across every job, the operations page is the starting point, and you can compare this with our other tools. For pricing the job itself before VAT, read the science of pricing for tradespeople and quotes that win more jobs. If you would rather have the whole back office handled, talk to us.

This is a directional checker, not tax advice. For edge cases (mixed supplies, materials, connected parties, a change in end-user status) confirm with the GOV.UK guidance linked in the FAQs or with your accountant before issuing the invoice.

Real benchmarks

The data behind the defaults

Every default value is anchored to a verifiable industry source.

1 Mar 2021
Date the VAT domestic reverse charge for construction came into force
Source: HMRC / gov.uk
20% / 5%
VAT rates the reverse charge can apply to (standard and reduced; zero-rated excluded)
Source: HMRC / gov.uk
We answer before you ask

Questions about this tool

The real questions we get about how to read these numbers.

Direct help

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  1. Q/01What is the VAT domestic reverse charge for construction?

    It is a way of accounting for VAT introduced on 1 March 2021 for most business-to-business construction services within the scope of the Construction Industry Scheme (CIS). Instead of the supplier charging VAT and paying it to HMRC, the customer accounts for the VAT themselves on their own VAT return. You, as the supplier, do not add VAT to your invoice. It was brought in to tackle missing-trader VAT fraud in construction supply chains.

    Sources & resources
  2. Q/02When does the reverse charge apply to a job?

    All of these must be true: you and your customer are both VAT registered; the supply is reported under CIS; the work is a construction service within CIS scope (not purely architecture or surveying on its own); your customer is not the end user; and the supply is standard-rated (20%) or reduced-rated (5%). If any one of these fails, you charge VAT in the normal way. The tool walks through each condition and gives you the verdict.

    Sources & resources
  3. Q/03What is the end-user exception?

    An end user is a VAT and CIS-registered business that receives construction services but does not sell those services on, for example a property owner having work done on a building it will use itself. The reverse charge does not apply to supplies to end users, so you charge VAT normally. The same applies to intermediary suppliers connected to an end user. End users and intermediaries must tell you in writing that they are end users; once they do, you do not need to keep asking for their status.

    Sources & resources
  4. Q/04What must my invoice say when the reverse charge applies?

    Your invoice must make clear that the domestic reverse charge applies and that the customer is required to account for the VAT. HMRC accepts wording such as “Reverse charge: customer to account for VAT to HMRC”, “VAT Act 1994 Section 55A applies” or “S55A VATA 94 applies”. You must also show the VAT rate or the amount of VAT due under the reverse charge, but you do not add that VAT to the total the customer pays you.

    Sources & resources
  5. Q/05Does the reverse charge apply to homeowners or zero-rated work?

    No. The reverse charge never applies to supplies to private individuals or consumers, such as a homeowner, because they are not VAT registered and are end users, so you charge VAT normally. It also does not apply to zero-rated supplies, or where either party is not VAT registered or the customer is not CIS registered. In all of those cases you handle VAT in the usual way.

    Sources & resources
  6. Q/06Is this tool tax advice?

    No. It is a directional checker to help you reason through the reverse charge rules quickly on a job-by-job basis. The rules have edge cases (mixed supplies, materials, connected parties, change in end-user status). For anything you are unsure about, confirm with the GOV.UK guidance linked above or with your accountant before you issue the invoice.

Keep going

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