UK Business Services

The Domestic VAT Reverse Charge has become a significant point of focus for businesses operating within specific UK industries, especially construction. Designed to reduce VAT fraud and improve transparency, this mechanism changes the way VAT is accounted for between suppliers and customers. If your business issues or receives VAT invoices, especially under the Construction Industry Scheme (CIS), it is important to understand how the Domestic VAT Reverse Charge works and how to apply it correctly. What is the Domestic VAT Reverse Charge? The Domestic VAT Reverse Charge is a compulsory VAT accounting measure that shifts the responsibility for reporting VAT from the supplier to the customer. Instead of the supplier charging VAT on an invoice, the customer accounts for both the output and input VAT on their own VAT return. This adjustment targets missing trader fraud and helps HMRC improve accuracy in VAT reporting. Although it mainly affects construction services, the reverse charge can ...