VAT reverse charge invoice template (construction, UK)

Not tax advice. This template shows CIS and reverse charge figures to help your customer. Your contractor works out the actual CIS deduction after checking your status with HMRC. If you are not sure whether the reverse charge applies, check the GOV.UK guidance or ask an accountant.

What the domestic reverse charge is

Since 1 March 2021, most supplies of building and construction services between VAT-registered businesses in the CIS chain use the VAT domestic reverse charge. Instead of you charging VAT and paying it to HMRC, your customer accounts for the VAT directly to HMRC.

According to GOV.UK, it applies when all of these are true:

• you and your customer are both registered for VAT in the UK;
• the payment is reported within the Construction Industry Scheme;
• the services are standard or reduced rated;
• your customer hasn't confirmed in writing that they are an end user or an intermediary supplier.

It doesn't apply to work for homeowners, because they aren't VAT-registered.

What the invoice must show

HMRC says a reverse charge invoice must show everything a normal VAT invoice shows. It must also make clear that the domestic reverse charge applies and that the customer must account for the VAT. It should state how much VAT is due under the reverse charge, or the rate if the amount can't be shown, without including the VAT in the amount charged. The regulations also require the reference "reverse charge".

This template does all of that. Tick VAT and the reverse charge, and the invoice:

• shows the VAT amount and rate, marked "reverse charge, not added";
• leaves it out of the total due;
• adds the wording "Reverse charge: customer to pay the VAT to HMRC. VAT Act 1994 Section 55A applies."

CIS is switched on too, because reverse charge work is reported under CIS. Untick it if you have gross payment status and want the line removed, or set the rate to 0%.

Mixed jobs

If a job mixes reverse charge services with other supplies, GOV.UK has a 5% disregard rule. If the reverse charge part is 5% or less of the whole contract value, it can be ignored. This must be agreed at the start, on the whole contract, not invoice by invoice.

Frequently asked questions

Do I add VAT to the total on a reverse charge invoice?

No. Show the VAT amount or rate, but don't include it in the amount you charge. Your customer pays it to HMRC.

Does the reverse charge apply to homeowners?

No. Homeowners aren't VAT-registered, so you charge VAT as normal if you're registered.

How does CIS work with the reverse charge?

The CIS deduction is worked out on the amount before VAT and only on labour, so the reverse charge doesn't change it.

What if the customer is an end user?

If they've confirmed in writing that they're an end user or intermediary, the reverse charge doesn't apply. Use a normal VAT invoice.

Guides

• CIS invoices explained for subcontractors
• Do I need to register for VAT?

Invoice templates for construction trades

For jobs that aren't under CIS, such as work for homeowners, use the standard invoice for your trade.

• Plumber invoice template
• Electrician invoice template
• Builder invoice template
• Painter and decorator invoice template
• Roofer invoice template