As a Contractor do we charge RC VAT onto client

CIS RC Contractor - Client

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Morning,

We have a client, us being the contractor, when we are charged for subcontractor services it gets charged onto our client with our management fees on top (seperated out on invoice).

When a subcontractor charges reverse charge VAT, when we pass this amount onto our client do we charge reverse charge to them aswell? The build is a conversion so is usually charged at 5%.

A bit confused about this, would appreciate some help!

Replies (7)

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RLI
By lionofludesch
06th Jan 2022 10:57

The VAT you charge depends on the goods or services which you supply.

It doesn't depend on VAT charged to you, whether or not on reverse charge.

Some subcontractors are VAT registered, some are not. It doesn't affect the VAT you charge to your customer.

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Replying to lionofludesch:
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By Accountsman123
06th Jan 2022 11:09

Thank you kindly, that is what we believed to be the case!

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Replying to Accountsman123:
RLI
By lionofludesch
06th Jan 2022 12:57

Well, yes. Bearing in mind you've no cost to pass on.

Presumably you're reclaiming all the input tax on the supplies to you.

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Danny Kent
By Viciuno
06th Jan 2022 15:40

In addition to Lion's reply remember to consider if your clients are end users

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Replying to Viciuno:
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By Accountsman123
06th Jan 2022 15:52

Hi Viciuno,

From my knowledge our clients are the end user.

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Replying to Accountsman123:
Danny Kent
By Viciuno
06th Jan 2022 16:08

Accountsman123 wrote:

Hi Viciuno,

From my knowledge our clients are the end user.

In that case you will need written confirmation from them that they classed as end users and you would charge them VAT as normal.

HMRC supply a somewhat useful flow chart which can be found at the bottom of the technical guidance (#25): https://www.gov.uk/guidance/vat-reverse-charge-technical-guide#end-users...

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Replying to Viciuno:
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By Accountsman123
06th Jan 2022 16:51

Thank you very much.

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