VAT Reverse Charge Seminar APPENDICES - Coalesco
Training and Guidance on Reverse ChargeVAT for Construction BusinessesFebruary 2021Coalesco Certified Accountants156 Russell Drive, Wollaton, Nottingham, NG8 2BETel: 0115 928 3228Email: linda.frier@coalesco.co.uk Coalesco Certified Accountants 20211www.coalesco.co.uk
APPENDICESCoalesco Certified Accountants156 Russell Drive, Wollaton, Nottingham, NG8 2BE2 CoalescoCertified2021Tel: 0115928Accountants3228Email: linda.frier@coalesco.co.ukwww.coalesco.co.uk
APPENDIX 1HOW REVERSE CHARGE WILL AFFECT THE WAY MONEY FLOWS IN THE INDUSTRYFirm in Chain Coalesco Certified Accountants 2021VAT before March 20213Reverse charge VATwww.coalesco.co.uk
APPENDIX 2DEFINITIONS & ACTIVITIESANNEX A: HMRC’S CORE DEFINITION OF “CONSTRUCTION SERVICES” – THIS IS THE SAME WORDING AS USED FORCIS:a) construction, alteration, repair, extension, demolition or dismantling of buildings or structures (whetherpermanent or not), including offshore installations.b) construction, alteration, repair, extension or demolition of any works forming, or to form, part of the land,including (in particular) walls, roadworks, powerlines, electronic communications apparatus, aircraft runways,docks and harbours, railways, inland waterways, pipelines, reservoirs, water mains, wells, sewers, industrialplant and installations for purposes of land drainage, coast protection or defence.c) installation in any building or structure of systems of heating, lighting, air-conditioning, ventilation, powersupply, drainage, sanitation, water supply or fire protection.d) internal cleaning of buildings and structures, so far as carried out in the course of their construction, alteration,repair, extension or restoration.e) painting or decorating the internal or external surfaces of any building or structure.f)services which form an integral part of, or are preparatory to, or are for rendering complete, the servicesdescribed in paragraphs (a) to (e), including site clearance, earth-moving, excavation, tunnelling and boring,laying of foundations, erection of scaffolding, site restoration, landscaping and the provision of roadways andother access works.Annexe B: THIS IS HMRC’S LISTOFACTIVITIESWHICH ARENOTINTHEMSELVES CONSTRUCTION SERVICES, BUT ARETREATED AS CONSTRUCTION SERVICES IF THEY ARE PROVIDED IN A PACKAGE WITH SERVICES LISTED IN ANNEX A:a) drilling for, or extraction of, oil or natural gas.b) extraction (whether by underground or surface working) of minerals and tunnelling or boring, or construction ofunderground works, for this purpose.c) manufacture of building or engineering components or equipment, materials, plant or machinery, or delivery ofany of these things to site.d) manufacture of components for systems of heating, lighting, air-conditioning, ventilation, power supply,drainage, sanitation, water supply or fire protection, or delivery of any of these things to site.e) the professional work of architects or surveyors, or consultants in building, engineering, interior or exteriordecoration or the laying-out of the landscape.f)the making, installation and repair of artistic works, being sculptures, murals and other works, which are whollyartistic.g) signwriting and erecting, installing and repairing signboards and advertisements.h) the installation of seating, blinds and shutters.i)the installation of security systems, including burglar alarms, closed-circuit television and public address systems. Coalesco Certified Accountants 20214www.coalesco.co.uk
APPENDIX 3SENDING OUT THE CORRECT INVOICE? NORMAL OR REVERSE CHARGE?Are you invoicing for the supply oflabour only as a gang master oremployment business or are youinvoicing for materials only?YESNORMAL VAT RULES APPLYCHARGE VATNONORMAL VAT RULES APPLYCHARGE VATNONORMAL VAT RULES APPLY BUTTHE SUPPLY IS ZERO RATED SO NOVAT CHARGEDNONORMAL VAT RULES APPLYCHARGE VATNONORMAL VAT RULES APPLYCHARGE VATYESNORMAL VAT RULES APPLYCHARGE VATNOIs any part of the supplies you are makingto the customer within the scope of CIS?YESIs the supply standard rated or reducedrated?YESIs your customer VAT registered?YESIs your customer registered for CIS?YESHas your customer providedconfirmation that it is an end-user?NOREVERSE CHARGE THE SUPPLY Coalesco Certified Accountants 20215www.coalesco.co.uk
APPENDIX 4CHECKING AN INCOMING INVOICEThis chart is to help businesses receiving an invoice or an application for payment to check whether it is correct incharging VAT or reverse charging.Is the supply for the supply of labour bya gang master or agency, or is it from abuilding materials supplier?YESINVOICE SHOULD CHARGE VATNOINVOICE SHOULD CHARGE VATNOINVOICE SHOULD CHARGE VATNOINVOICE SHOULD CHARGE ZERORATED VAT or BE FOR ANEXEMPT SUPPLYNOIs your own firm registered for CISAND VAT?YESIs the supply received within the scope ofCIS?YESIs the supply standard rated or reducedrated?YESHave I told my supplier that I am anend-user? E.G. is the building to be soldor rented as an asset or used by this firmas offices?YESINVOICE SHOULD CHARGE VATNOREVERSE CHARGE INVOICESHOULD HAVE BEEN RECEIVED Coalesco Certified Accountants 20216www.coalesco.co.uk
APPENDIX 5SALES INVOICEINVOICETo:Main ContractorFrom: Sub-contractorAddress:Address:Supplier VAT Reg. No:Customer VAT Reg. No:Invoice No:Invoice Date:DescriptionNet Construction of new housingSupply of ovens/hobs in newhousingConstruction of retailpremises200,00020,000100,000Non-residential toresidential conversion150,000TOTAL470,000VATRateVAT Gross 0%0200,00020%DomesticReverseCharge Applies20,00020%DomesticReverseCharge Applies100,0005%DomesticReverseCharge Applies150,000Payable470,000Customer to account to HMRC for the reverse charge output tax on the VAT exclusive price ofitems marked ‘reverse charge’ at the relevant rate as shown above. S55A VATA 1994 applies.Standard Rate Output VAT subject to a reverse charge: 24.000 Reduced Rate Output VAT subject to a reversecharge: 7,500 Coalesco Certified Accountants 20217www.coalesco.co.uk
APPENDIX 6Example pre- and post- 1st March 2021 for the customer and oicereceiver)Transactions not under reversechargeBox 1 20Box 6 100Box 4Box 7 Coalesco Certified Accountants 2021Transactions under reverse charge 20 1008Box 1Box 6 0 100Box 1Box 4Box 7 20 20 100www.coalesco.co.uk
SALES INVOICE INVOICE To: From: Sub-contractor Main Contractor Address: Address: Supplier VAT Reg. No: Customer VAT Reg. No: Invoice No: Invoice Date: Description Net VAT Rate VAT Gross Construction of new housing 200,000 0% 0 200,000 Supply of ovens/hobs in new
A Practical Guide to Reverse VAT 1. Contents 2. What is Reverse VAT? 3. Will Reverse VAT affect your business? 4. What is an End User? 5. Commercial End Users 6. Domestic End Users 7. When will Reverse VAT begin? 8. The Current VAT System 9. The New Reverse VAT System 10. Construction services subject to Reverse VAT 11. What else does Reverse VAT apply to? 12. Services NOT subject to .
Clearly state the amount of VAT due under the reverse charge or the rate of VAT if the VAT amount cannot be shown under the reverse charge Include wording on the invoice that shows the domestic reverse charge applies, e.g. ‘Domestic reverse charge: we will account for and pay th
VAT ( ) C VAT EU Tax Authorities * Electronic Interface EU , VAT EU-established Intermediary (Tax Representative) . Tax Representative VAT Return VAT EU Tax Authorities VAT & IOSS No. Commercial Invoice Data DHL IOSS EU Tax Authorities VAT Return VAT 10
1. VAT inclusive A The VAT received by a business from sales of goods or income earned. 2. VAT vendor B Payments which are made twice in a month. 3. Input tax C VAT is excluded in the marked price. 4. VAT invoice D Receipts issued by SARS for VAT payments. 5. VAT exclusive E VAT is payable when the
invoice; make a note on the invoice to make it clear that the domestic reverse charge applies and that the customer is required to account for the VAT; clearly state how much VAT is due under the reverse charge, or the rate of VAT if the VAT amount cannot be shown, but the VAT shou
Example notice wording from HMRC is: ‘We are an end user for the purposes of section 55A VAT Act 1994 reverse charge for building and construction services. Please issue us with a normal VAT invoice, with VAT charged at the appropriate rate. We will not account for the reverse charge.
We are an end user for the purpose of the Section 55A VAT Act 1994 reverse charge for building and construction services. Please issue us with a normal VAT invoice with VAT charged at the appropriate rate. We will not account for the reverse charge. If end user statements are given to
Unit 5: American Revolution . 2 A m e r i c a n R e v o l u t i o n Political and Economic Relationships between Great Britain and the Colonies England became Great Britain in the early 1700s, and it was throughout this century that the British colonies in America grew and prospered. The growth of the colonies made it more and more difficult for Great Britain to remain in control. King .
