Works out whether a construction supply is invoiced under the VAT domestic reverse charge, normal VAT, or sits outside the reverse-charge legislation, plus the invoice wording and VAT arithmetic for whichever outcome applies.
Answer the six HMRC questions below in order (VAT Act 1994 s55A) for a definitive result on this supply.
For guidance only. This tool decides a single supply; always verify with HMRC or your accountant, especially for mixed supplies.
About this VAT domestic reverse charge calculator
This free VAT domestic reverse charge calculator decides how a single construction supply should be invoiced, under the domestic reverse charge (net only), with VAT as normal, or outside the reverse-charge legislation altogether. And gives the invoice wording and VAT arithmetic for whichever outcome applies. It is aimed at construction subcontractors, contractors and their bookkeepers working out whether to charge VAT on a building & construction service, following HMRC’s statutory test under VAT Act 1994 s55A. Answer the six questions in order. Everything runs in your browser. Nothing is uploaded.
How the VAT treatment is decided
The tool follows HMRC’s fixed decision sequence (VAT Act 1994 s55A, VATREVCON manual): specified construction service → standard/reduced rated → customer VAT-registered → customer CIS-registered → end-user/intermediary notification → supplier is an employment business → reverse charge. The first gate that fails fixes the outcome, so it is deterministic even when several would block the charge. A non-specified service or a zero-rated/exempt supply falls outside scope; a customer who is not VAT- or CIS-registered, who has given end-user notification, or a supply of staff by an employment business takes normal VAT; only when all conditions are met does the reverse charge apply. The arithmetic is VAT = net × rate (20% or 5%), with the amount payable being net + VAT when VAT is charged, or the net alone under the reverse charge.
Frequently asked questions
What is a “specified” construction service?
It is a CIS construction operation caught by the reverse charge, broadly, on-site construction, alteration, repair and installation work, minus HMRC’s specific exclusions such as architects and surveyors, security-system installation and off-site manufacture. If the supply is not a specified service the reverse charge never applies, and it is invoiced with normal VAT.
What is end-user or intermediary notification?
An end user (who does not on-supply the construction service, e.g. the building’s owner or main contractor selling a finished building) or an intermediary supplier can give the subcontractor written notification that it is an end user or intermediary. That notification (VATREVCON33100) takes the supply out of the reverse charge, so the subcontractor charges VAT in the normal way.
Does it handle mixed supplies and the 5% disregard?
No: the tool decides one supply at a time. HMRC’s 5% disregard lets both parties treat a whole supply as normal VAT when the reverse-charge element is 5% or less, but only if agreed at the start of the contract on overall values, so it is a whole-contract judgement this calculator does not attempt. Always verify with HMRC or your accountant, especially for mixed supplies.