TRADEKIT FIELD GUIDE · REVIEWED 7 OCTOBER 2026
VAT domestic reverse charge for construction explained
The construction domestic reverse charge shifts responsibility for accounting for VAT on certain qualifying supplies from the supplier to the customer. Several conditions and exceptions apply.
Check all of the main conditions
HMRC guidance says the charge generally applies when the supplier is UK VAT registered, the supply is a qualifying construction service within CIS, the customer is UK VAT registered, the supply is standard or reduced rated, and the customer has not provided written end-user or intermediary-supplier notification. Employment businesses supplying workers are treated differently.
Do not decide from “construction” alone
Some services are excluded, mixed supplies can have special treatment, and the end-user/intermediary concepts have specific definitions. Labour-only subcontracting is not the same as an employment business supplying staff. Confirm both the nature of the supply and the customer’s status. Ask for written notification where relevant and retain it.
Invoice and cash-flow steps
If the reverse charge applies, use accounting software and invoice wording that meets HMRC requirements and record the VAT in the correct VAT return boxes. The supplier does not collect that VAT from the customer, which can affect cash flow. If the reverse charge does not apply, normal VAT rules may apply instead.
Use the checklist as a prompt
The TradeKit check walks through high-level conditions only. If any answer is uncertain, the service is mixed, or a written notification is unclear, stop and check HMRC’s technical guide or ask an accountant before invoicing.
Practical checklist
- Confirm UK VAT registration and CIS reporting conditions.
- Identify whether the service and VAT rate fall in scope.
- Check for written end-user/intermediary notification.
- Confirm invoice language and accounting treatment with HMRC guidance.
Common questions
Does the reverse charge apply to every construction invoice?
No. It applies only when the relevant conditions are met; exemptions and exclusions are detailed in HMRC guidance.
Does a private householder use the reverse charge?
A private domestic customer is not UK VAT registered, so this condition is not met. Other facts and the actual supply still matter.
Official references
Use the current source material and your contract for the specific facts. These links support this guide; they are not a substitute for individual advice.
Last reviewed 7 October 2026. TradeKit guides explain general process and arithmetic and are not legal, tax or accounting advice.