On 1 March 2021 the long-delayed changes to the charging of VAT in the construction industry take effect.
The changes affect sub-contractors who normally charge VAT on their services, and their customers. From 1 March the sub-contractors should not charge VAT on certain services but issue “reverse charge” invoices to the contractors they supply their services to. Contractors who receive reverse charge services will then have to account for VAT at the appropriate rate using the reverse charge procedure.
The construction services affected are those defined in the Construction Industry Scheme (CIS) and so if your services are within CIS you are likely to be affected by the VAT changes.
Some services are not affected by the changes, these are principally zero-rated services and services supplied to the “end-user”, the last person in the chain of supply.
For more information on the changes see https://www.gov.uk/guidance/vat-domestic-reverse-charge-for-building-and-construction-services