Guidance

Check when you must use the VAT domestic reverse charge for building and construction services

Find out about the reverse charge for supplies of services reported within the Construction Industry Scheme (CIS).

• From: HM Revenue & Customs
• Published: 7 June 2019
• Last updated: 24 September 2020 — See all updates

The VAT domestic reverse charge must be used for most supplies of building and construction services.

The charge applies to standard and reduced rate VAT services:

• for businesses who are registered for VAT in the UK
• reported within the Construction Industry Scheme

When you must use the VAT domestic reverse charge

The list of services in this guide is the same as the list of ‘construction operations’ covered by the Construction Industry Scheme, except for supplies of workers provided by employment businesses. Find out more about supplies of workers by employment businesses in the VAT reverse charge technical guide.

You should check guidance to help you if you’re a contractor or sub-contractor within the Construction Industry Scheme: CIS 340 guide.

You must use the charge for the following services:

• constructing, altering, repairing, extending, demolishing or dismantling buildings or structures (whether permanent or not), including offshore installation services
• constructing, altering, repairing, extending, demolishing of any works forming, or planned to form, part of the land, including (in particular) walls, roadworks, power lines, electronic communications equipment, aircraft runways, railways, inland waterways, docks and harbours, pipelines, reservoirs, water mains, wells, sewers, industrial plant and installations for purposes of land drainage, coast protection or defence
• installing heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection systems in any building or structure
• internal cleaning of buildings and structures, so far as carried out in the course of their construction, alteration, repair, extension or restoration
• painting or decorating the inside or the external surfaces of any building or structure
• services which form an integral part of, or are part of the preparation or completion of the services, including site clearance, earth-moving, excavation, tunnelling and boring, laying of foundations, erection of scaffolding, site restoration, landscaping and the provision of roadways and other access works

When you must not use the VAT domestic reverse charge

Do not use the charge for the following services, when supplied on their own:

• drilling for, or extracting, oil or natural gas
• extracting minerals (using underground or surface working) and tunnelling, boring, or construction of underground works, for this purpose
• manufacturing building or engineering components or equipment, materials, plant or machinery, or delivering any of these to site
• manufacturing components for heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection systems, or delivering any of these to site
• the professional work of architects or surveyors, or of building, engineering, interior or exterior decoration and landscape consultants
• making, installing and repairing art works such as sculptures, murals and other items that are purely artistic
• signwriting and erecting, installing and repairing signboards and advertisements
• installing seating, blinds and shutters
• installing security systems, including burglar alarms, closed circuit television and public address systems

If the reverse charge does not apply you should follow the normal VAT rules and procedures.

Before you use the VAT domestic reverse charge

You’ll need to find out how the reverse charge works if you:

• supply building and construction industry services
• buy building and construction industry services

If the reverse charge does apply you’ll need to:

• make sure your accounting systems and software can deal with the reverse charge
• check how it will affect your cash flow — read changes to cash flow and monthly returns in the VAT reverse charge technical guide
• make sure all your staff who are responsible for VAT accounting are familiar with the reverse charge and how it works

More information

You can find more information by watching our online webinars to learn more about VAT.

Published 7 June 2019
Last updated 24 September 2020 + show all updates

1. 24 September 2020

   The guidance across all sections has been updated including steps to take to make it easier for users to follow.

2. 5 June 2020

   The introduction of the domestic reverse VAT charge for construction services has changed from 1 October 2020 to 1 March 2021.

3. 9 September 2019

   The introduction of the domestic reverse VAT charge for construction services has changed from 1 October 2019 to 1 October 2020.

4. 9 September 2019

   The VAT reverse charge effective dates have been updated to 2020 within the guidance.

5. 29 August 2019

   A webinar about what sub-contractors need to do for the new 'VAT reverse charge for construction services' has been added.

6. 25 June 2019

   Information about what you need to do to be ready for the start of the domestic reverse charge has been added to the guidance.

7. 7 June 2019

   First published.