Will the CIS Reverse Charge affect me?

A reminder that from 1st March 2021, the long-awaited VAT changes for CIS registered contractors, who register for VAT, will apply.

What will happen on 1st March 2021?

At the moment, when you receive an invoice from a subcontractor for construction services and the subcontractor is registered for VAT, you will pay the VAT inclusive amount to them and claim back when submitting your VAT return. 

You can read our previous blog post by clicking here to find out more. But in the meantime, below, you will find a full list of services that will and will not be affected by the pending changes.

The domestic reverse charge will be applied if you are the supplier of any of the below services:

  • altering, constructing, extending, repairing, dismantling buildings or demolishing structures (whether permanent or not), this includes any off-shore installation services
  • altering, constructing, extending, repairing, demolishing of any works planned to form or forming, part of the land, including (in particular) roadworks, walls, electronic communications equipment, power lines, railways, inland waterways, docks, harbours, and aircraft runways
  • water mains, wells, sewers, pipelines, reservoirs, installations for purposes of land drainage, coast protection, or defence and industrial plants
  • installing air-conditioning, ventilation, power supply, heating, lighting, sanitation, water supply, drainage, or fire protection systems in any structure or building
  • internal cleaning of structures and buildings, restoration, alteration, repair, or extension
  • decorating or painting internally or any external surfaces of any structure or building
  • any service that forms any or is part of the completition or preparation of any services described above – which includes the laying of foundations, erection of scaffolding, site restoration, site clearance, earth-moving, excavation, the provision of roadways and other access works, tunnelling, boring, and landscaping

Below, the list of services that are not subject to the upcoming reverse charge:

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

An Accounting Gem can help with the upcoming changes in legislation. Call today on 01473 744700, email contactus@accountinggem.co.uk, or visit our website www.aag-accountants.co.uk. We’re here to help you every step of the way.