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What is the reverse charge and when does it apply to building work?

The reverse charge is a procedure whereby the recipient of a supply, rather than the supplier, is required to account for the VAT due on the supply.

A reverse charge applies to most building work and other specified services subject to VAT at a rate other than the zero rate and supplied to a business at a location in the UK if at least one of the following conditions are met:

1. •

   the supplier belongs in a country other than the UK and the recipient of the supply belongs in the UK and is registered for VAT

2. •

   the supplier and the recipient of the supply are registered for VAT and the service is reported within the construction industry scheme (CIS)

VATA 1994, ss