Six questions, in the order they have to be answered, and you will know whether to charge VAT on the invoice or to state that the customer accounts for it.
Construction, alteration, repair, extension or demolition, works to the land, and installing heating, lighting, power, drainage, sanitation, water or fire protection systems. Security systems, signwriting and manufacturing components are excluded.
Zero-rated supplies are outside the reverse charge entirely.
Absent a written notification the reverse charge is the default. Keep one notification on file per commercial customer rather than per job, and get it before you invoice rather than after a query. A householder is neither VAT nor CIS registered, so domestic work sits outside the reverse charge entirely and you charge VAT normally.
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The order matters
The domestic reverse charge applies to invoices with a tax point on or after 1 March 2021, under section 55A of the VAT Act 1994, and only where all six conditions hold. The order the tool asks them in is the order they have to be answered, because an earlier answer can make a later one irrelevant.
This is the part people get wrong. The reverse charge uses the CIS definition of construction operations to set its scope, but it is not part of the CIS. It applies where a payment has to be reported under the CIS regulations — not by reference to whether a deduction is actually made. A subcontractor with gross payment status is still within the reverse charge on the same work.
The end user and intermediary supplier exclusions both depend on the customer telling you in writing. Absent that notification the reverse charge is the default, not the normal charge. So if you do not hold a notification, you apply the reverse charge — and charging VAT normally instead creates an error on both sides of the transaction.
HMRC suggests wording along these lines for the customer to send you: "We are an end user for the purposes of section 55A VAT Act 1994 reverse charge for building and construction services. Issue us with a normal VAT invoice, with VAT charged at the appropriate rate." Once you have it, you do not need to seek further evidence.
These tools use sensible simplifications. A free CIS review gets you the accurate version — and usually two or three things worth fixing before your year end.
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