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Domestic Reverse Charge - End User

Last week's debate - which I can't find now ....

Didn't find your answer?

There was a debate on here last week about the DRC, clouded by folk making irrelevant comments about zero rated work.

Did we ever come to a conclusion about end users ?

I've got three scenarios.

1.  Supply chain is subcontractor > contractor > householder.  Standard rated work on an extension. Is the supply by the subcontractor in the DRC legislation ? I vote yes because the contractor is supplying construction services.

2.  Supply chain is subcontractor > contractor > a business. Standard rated work on building a brand new office on land already owned by the ultimate customer. I still vote yes, because this is construction services too.

3.  Supply chain is subcontractor > property developer > a business.  Developer buys a plot of land, builds an office and supplies it to a customer.   I can see an argument that this isn't a supply of construction services but my logical mind still thinks the supply by the subcontractor is within the DRC.

Any thoughts ?  It's purely academic as I don't have any construction industry clients now.  I'm just interested.

Replies (7)

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chips_at_mattersey
By Les Howard
03rd Dec 2020 17:24

1. yes
2. yes
3. yes, although I understand your comments; and can see disputes arising. The definition of 'end user' in the SI is not helpful.

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Replying to leshoward:
RLI
By lionofludesch
03rd Dec 2020 17:27

leshoward wrote:
The definition of 'end user' in the SI is not helpful.

No, it's not. I'm sure I could've written something better myself by focussing on "user" rather than "construction services".

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Ivor Windybottom
By Ivor Windybottom
03rd Dec 2020 17:25

The subcontractors would all be within the DRC.

The main contractor will also be in the DRC if their customer is making a supply of construction services, but not when the customer is, say, a landlord whose only supply is one of land & buildings for rent (i.e. no supply of construction services).

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avatar
By Bobbo
03rd Dec 2020 19:01

As one of those folk making an irrelevant comments about zero rated work I will add this: whilst of course it doesn't apply to zero rated work my comments were merely aimed at putting the posited scenario in the context of the reverse charge, were it applicable.

This is the thread btw: https://www.accountingweb.co.uk/any-answers/vat-reverse-charge-and-new-b...

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Replying to Bobbo:
RLI
By lionofludesch
04th Dec 2020 07:18

Yeah - granted. But I think you came up with the wrong answer, Bobbo. Your house example is the zero rated equivalent of my third scenario above.

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Replying to lionofludesch:
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By Bobbo
04th Dec 2020 09:46

Did I?

Better add this to the CPD list.

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Replying to Bobbo:
RLI
By lionofludesch
04th Dec 2020 09:52

Other opinions are available.

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