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Domestic Reverse Charge for supplies of building and construction services

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edited Jan 18, 2021 1:51PM in Tax & Global 2 comments

Summary

Effective 01 March 2021

Content

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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