We are a main contractor on a new build project, which on the whole is VAT exempt apart from a few subcontractors who are CIS and VAT registered so will fall under the new DRC VAT rule. One such supplier is a kitchen supplier who charges VAT on white goods. we as a contractor cannot reclaim this VAT. Under the new ruling we will now pay the VAT to HMRC instead of the supplier. If (as advised) i use the new T21 coding in sage - this will pay the VAT to the HMRC but on the same return it will also reclaim the VAT - but we cannot claim it back - any suggestions on what code I now use?
Replies (14)
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Are you the end user?
Have you advised your subcontractors that you are the end user?
It there a contractor that you are the subcontractor to?
What exempt supplies are you making?
DIY or do you have an accountant?
See the BDO link
You appear to be the end user
https://www.accountingweb.co.uk/any-answers/end-user
https://www.accountingweb.co.uk/resources/construction-reverse-charge-vat-
https://www.bdo.co.uk/en-gb/insights/tax/vat-and-indirect-taxes/domestic...
Not an easy to follow explanation, but good enough.
next person up needs to be registered for VAT and registered CIS for next person up to be the possible end user
If they are the end user they should confirm end user status to you
My advice would be to first work out the trail of people and their status, work out the vat from that then worry about the sage code.
To many people rely on sage tax codes for the answer without understanding what comes before it.
One such supplier is a kitchen supplier who charges VAT on white goods. we as a contractor cannot reclaim this VAT.
Why not ? Contractors can claim VAT on building materials and non-building materials. Or are you a developer ?