Do I charge VAT on this invoice?
The VAT domestic reverse charge for construction, answered for one invoice at a time — including the wording HMRC wants on it. Free, nothing to sign up for.
Zero-rated work — a new build, for instance — is outside the charge.
Building, civils, installation, repair. Not architecture, surveying or hiring plant on its own.
A householder or an ordinary commercial customer is not.
An end user has the work done for themselves rather than selling it on. Nothing in writing means no declaration — and the charge still applies.
The reverse charge applies. Do not charge VAT.
Invoice £5,000.00. The VAT of £1,000.00 is not added and not collected by you — your customer accounts for it to HMRC.
Your invoice must say so. This wording does it:
Reverse charge: VAT Act 1994 Section 55A applies. Customer to pay the VAT of £1,000.00 (20%) directly to HMRC. It is not included in the amount charged.
Five things have to be true at once
The reverse charge is not a judgement call. It applies when you are VAT-registered, the work is construction within CIS, your customer is a CIS contractor, the work is at the standard or reduced rate, and they have not declared themselves the end user. Miss any one and you charge VAT as normal.
The checker above walks all five, and tells you which one stopped it.
Two of them are not yours to answer
Whether your customer is VAT-registered, and whether they are the end user, are facts only they hold. Nobody can work them out from the job. Both need asking, and the end-user declaration needs to be in writing — without it, you cannot rely on it.
Ask before the first invoice. Asking afterwards means correcting an invoice the customer is already holding.
No end-user declaration means the charge applies
This is the one most people have backwards, and it is worth being plain about. Once the other conditions are met, the reverse charge applies by default. The only thing that stops it is your customer telling you in writing that they are an end user or an intermediary supplier. HMRC’s own manual says that not being told entitles you to assume the charge applies.
So silence is not doubt here — it is the answer. Charging VAT on a supply the charge covers is the error being assessed for, because your customer then reclaims input tax that was never due.
Whether they are VAT-registered is different: that genuinely has no default, so ask it before the first invoice rather than guessing.
The invoice has to say so
A reverse charge invoice with no explanation on it is a VAT problem waiting to be found. It has to show that the charge applies, that the customer accounts for the VAT, and how much VAT that is — while keeping it out of the total. The checker gives you wording that does all three.
A note on what this is
A guide, not advice, and it cannot know everything about your contract. Check anything that matters with your accountant.
Built by TaskMyJob, which decides this on every invoice it raises, using the same rule. More free reading: the CIS calculator, CIS on a subcontractor invoice, or all the guides.