Domestic Reverse Charge for supplies of building and construction services
Summary
Effective 01 March 2021Content
In March 2021 Domestic Reverse Charge (DRC) is introduced for the UK Construction Industry. It is a process for handling VAT.
Link to guidance: https://www.gov.uk/guidance/vat-domestic-reverse-charge-for-building-and-construction-services
What have customers done to tackle this? I'd like to start a discussion on implementation advice, challenges and pearls of wisom that people are willing to share. Our approach;
- Setup of separate Tax Rates which are linked to Offset Taxes
- Eligble suppliers flagged with Registration Status, and Default Tax Classification Code. Tick the 'Allow Offset Taxes' checkbox
- Eligible customer contracts flagged with the correct Default Tax Classification Code depending on end user/intemediary user confirmation
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