Constructions Industry Scheme (CIS) reverse charge for VAT is coming this October and it is barely been discussed. Its major change to the way that contractors allied to construction industry will have to administer the payments made to their VAT registered sub-contractor.
What It Means?
For certain supplies of construction services that the main contractor on a project will be liable to account for the VAT on those purchases and costs other than the supplier. It will apply throughout the supply chain until the customer receiving the supply is no longer a ‘business making supplies of specified services’. These businesses and individuals are referred to by HMRC as the ‘end user(s)’.
The reverse charge VAT will have a serious impact on many construction contractors – particularly the small ones.
