Reminder: Domestic Reverse Charge for construction and building services

News posted by Tommy Chung 8 months ago

Hi all,

A quick reminder that from the 1st March 2021, the domestic VAT reverse charge must be used for most supplies of building and construction services.

You must use the reverse charge, 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

How to use the VAT reverse charge if you supply building and construction services

Clear Books is prepared for this. Our ‘Domestic Reverse Charge VAT for construction and building services’ feature is already available to use.

This can be toggled on under Settings > Configure System > Toggle Features > VAT & Bank import tool, just tick the checkbox beside the ‘Domestic Reverse Charge’ option.

As a subcontractor, if you require to apply the reverse charge to a sales invoice you will be able select ‘Domestic Reverse Charge’ under the VAT treatment.

As a contractor, if you receive an invoice which has DRC applied, you can create a bill and select ‘Domestic Reverse Charge’ under the VAT treatment.

The system will ensure that these transactions are included in the correct VAT boxes.

For further details on how to use this within Clear Books, please see:

How to enable and use the Domestic Reverse Charge for building and construction services

For further information from HMRC, please see:

VAT reverse charge technical guide

Flow chart for subcontractors wanting to know whether to apply DRC

Flow chart for contractors wanting to know whether invoices they receive should incur DRC

Tommy

6 Replies

hi Tommy

we have Toggled on the DRC feature, however there is no DRC drop down for the VAT treatment appearing in either sales or purchase invoices

this has happening on multiple clients

we will this be workign correctly

also there is no option to turn this feature on for clients using the cashbook version

Hi Tommy

We have the same issue - where the DRC does not show in the VAT drop down menu when creating new invoices.

Please advice on when this will be ready to use?

many thanks Millie-Ann

Hi both,

I have taken a look, It seems as though you may be on our discontinued invoice creation form which no longer supports updates. In this case, if you click on Preview (top left) > Click Preview under Better Invoicing. Once this has been completed, you should then see a VAT treatment dropdown when creating invoices/ bills.

Please let me know if the problem persists?

Tommy

Hi Tommy, it worked!

Thank you for the quick reply.

Best wishes Millie-Ann

When i go onto the preview page it constantly flashes, therefore i can't change click on anything and change onto the newer version of better invoicing...

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