Suppliers are no longer required to charge or receive VAT from their main contractor customers. Instead, main contractors effectively charge themselves VAT on subcontractors’ services, and pay the VAT sums that would have been paid to the subcontractor direct to HMRC in their VAT returns.
Do subcontractors have to register for VAT?
Non-established traders engaged in construction operations as subcontractors are not required or entitled to account for VAT on such services when supplied to a principal contractor. However, they will be required to register for the purpose of reclaiming VAT.
Does VAT reverse charge apply if you are not CIS registered?
You should not use the reverse charge if your customer is not registered under CIS. Supplies to non-CIS registered businesses do not fall within the reverse charge. 4. A person who is not required to be VAT-registered because it does not carry on a business, is also an end-user.
Do you have to pay VAT if you are a sub contractor?
At present, sub-contractors registered for VAT are required to charge VAT on their supplies of building services to contractors.
Can a subcontractor re-claim the VAT on accommodation?
Hopefully a simple question. If a contractor arranges and pays for accommodation for sub-contractors who are working for him can the Contractor re-claim the VAT? I’ve been told not but I can’t really see the logic.
Can a non registered trader reclaim a subcontractor VAT?
Technically you cannot reclaim the VAT because they have gone through the hands of a non-registered trader. You could if the expenses were contracted for in your name, and the subbies acted as your agent. You could set up accounts with suppliers that can be operated by regular subbies.
When does VAT reverse charge for construction services start?
The introduction of the domestic reverse VAT charge for construction services has changed from 1 October 2019 to 1 October 2020. The VAT reverse charge effective dates have been updated to 2020 within the guidance. A webinar about what sub-contractors need to do for the new ‘VAT reverse charge for construction services’ has been added.
