VAT Reverse Charge for Building and Construction Services Manual

VATREVCON36200 - How the construction reverse charge works: Partial exemption and the reverse charge: Capital Goods Scheme

Where the construction, alteration, repair, extension, demolition, or dismantling of an item that comes under the Capital Goods Scheme is subject to the reverse charge, the Capital Goods Scheme must still be applied as normal. The output tax accounted for by the customer under the reverse charge must not be taken into account when calculating the amount of input tax to be recovered or adjusted at the end of the relevant interval, as the Capital Goods Scheme calculation is connected with the outputs for which the capital item is used and not with any output tax accounted for under the reverse charge mechanism.