Domestic Reverse charge Entry

Problem reported by Tony Crundell 4 years ago

entry for domestic reverse charge subcontractor invoices is misleading and will cause confusion

you are forced to enter a VAT rate of 20%, 5% or manual and there is no option for 0% VAT

in most cases 0% VAT is what is being charged

you are forcing users to make a manual decision about which rate of VAT to use which may or may not be correct as this will now longer be available for reference from the invoice.

1 Reply

Hi Tony,

In accordance to HMRC's guidance:

'From 1 March 2021 the domestic VAT reverse charge must be used for most supplies of building and construction services. The charge applies to standard and reduced-rate VAT services: for individuals or businesses who are registered for VAT in the UK reported within the Construction Industry Scheme'

Therefore, we have decided to only allow users' to select the Standard or Reduced rate. The system will then 'reverse' out the VAT such that the liability is 0. In the meantime, the invoice PDF will also show a statement indicating the supply is subject to the Reverse Charge outlining the VAT rate/ amount reversed. The VAT rate and statement is paramount for end users to identify how much VAT they would have to pass onto HMRC directly.



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