Does the VAT reverse charge apply to my invoice?

It applies when six conditions are all met: the work is within the scope of CIS, the supply is standard-rated or reduced-rated, both supplier and customer are VAT registered, the customer is CIS registered as a contractor, and the customer is not an end user or intermediary supplier. If any one fails, charge VAT in the normal way.

Does the reverse charge apply to zero-rated work?

No. Zero-rated supplies, which include most new-build housing, are outside the domestic reverse charge. The supplier invoices at the zero rate as usual.

What is an end user for the VAT reverse charge?

An end user is a customer who receives construction services for their own purposes rather than to sell the work on, typically the business that will keep, occupy or let the finished building. A supply to an end user falls outside the reverse charge, but only where the customer has confirmed their status in writing.

What wording goes on a reverse charge invoice?

The invoice must make clear the reverse charge applies and that the customer is required to account for the VAT. A commonly used form is: “Reverse charge: VAT Act 1994 Section 55A applies. Customer to pay the VAT to HMRC.” The rate or amount of VAT that would have applied is shown for information and is not added to the total.

Who pays the VAT under the reverse charge?

The customer. The supplier charges none and declares the net sale only; the customer accounts for the output tax on their own return and recovers it as input tax where they are entitled to, which is usually cash-neutral to them.

Is this checker legal or tax advice?

No. It applies the conditions published in VAT Notice 735 to the answers you give and names the condition that decides the outcome. It cannot read your contract, and it cannot know whether your customer is an end user. Only your customer can tell you that.

Free tool

VAT domestic reverse charge checker

The VAT domestic reverse charge has applied to construction services since 1 March 2021, and it applies only when six conditions hold together: the work is within the scope of CIS, the supply is standard-rated or reduced-rated, supplier and customer are both VAT registered, the customer is CIS registered as a contractor, and the customer is not an end user or intermediary supplier. Answer the six and this names the one that decided it, including the case where the answer is not yours to give, because whether a customer is an end user is theirs to confirm in writing.

Last reviewed 10 September 2026 by Estimark. This page states periods and rates set by statute or by standard contract terms. Those move, and this date is when somebody last read the page against its source rather than the day the site was built.

VAT reverse charge

Six conditions, and all of them have to hold

Nothing is sent anywhere and nothing is stored. This follows the conditions published in VAT Notice 735; it is not a ruling and it cannot read your contract.

1. Are the services within the scope of CIS?
Construction operations as CIS defines them. Professional work such as architecture and surveying, and standalone supplies of materials, are outside it.
2. Is the supply standard-rated or reduced-rated?
Zero-rated work, which covers most new-build housing, is outside the charge.
3. Are you VAT registered?
The supplier. Below the threshold and unregistered, there is no VAT to shift.
4. Is your customer VAT registered?
They have to be able to account for the VAT themselves. Get the number and check it.
5. Is your customer registered for CIS as a contractor?
Registered as a contractor who makes CIS payments, rather than as a subcontractor who receives them.
6. Has your customer confirmed in writing that they are not an end user or intermediary supplier?
An end user is the one who keeps the building rather than selling the work on. This answer is theirs to give, and it has to be in writing.

One condition is outstanding, and it is not yours to decide.

You cannot answer this yet

Every other condition is met, so the answer turns on whether the customer is an end user or an intermediary supplier. That is theirs to state, and you need it in writing before you decide.

What to ask them for

An end user is the business that keeps the finished building rather than selling the work on. An intermediary supplier is connected to the end user and supplies on to them. Either one takes the supply out of the charge, and both have to tell you in writing. HMRC puts the duty on the customer, and a supplier who charges VAT without that statement is the one left holding it.

Until you have it, answer the last question honestly rather than optimistically.

Estimark records the reverse charge against the client, applies it to every invoice raised for them, and puts the section 55A wording on the document itself, so it cannot be forgotten one invoice at a time. How the reverse charge works in Estimark.

When does the reverse charge apply?

When all six conditions in VAT Notice 735 are met at once. Fail any one of them and the supplier charges VAT in the normal way.

Condition	Whose answer it is
The supply is construction services within the scope of CIS	Yours, from the work
The supply is standard-rated or reduced-rated	Yours, from the work
The supplier is VAT registered	Yours
The customer is VAT registered	Theirs, and checkable
The customer is CIS registered as a contractor	Theirs, and checkable
The customer is not an end user or intermediary supplier	Theirs alone, in writing

The last one is the only condition a supplier cannot establish for themselves, and it is the one that most often decides the answer.

What is an end user?

The business that keeps the finished building rather than selling the construction work on. A supply to an end user is outside the reverse charge, and the customer has to say so in writing.

A developer building to sell or let is usually an end user. A main contractor engaging you on their site usually is not.
An intermediary supplier is connected to the end user, or shares an interest in the same land, and supplies on to them. Treated the same way.
Their statement can sit in a contract, a purchase order, an email, or a standing declaration covering future supplies. It has to exist somewhere you can produce.
No written statement means the reverse charge is the default position, and HMRC expects the supplier to apply it.

Charging VAT on the strength of a verbal assurance leaves the supplier owing HMRC out of their own margin. Ask for it in writing before you invoice.

What has to be on the invoice?

Enough to make clear the reverse charge applies and that the customer is the one accounting for the VAT, plus the rate or amount that would otherwise have been charged.

A form of words referring to section 55A of the VAT Act 1994 and stating that the customer pays the VAT to HMRC.
The VAT rate that would have applied, or the VAT amount, shown for information and excluded from the total.
The total payable is the net figure. Adding VAT to it is the error a customer’s bookkeeper rejects the invoice for.

What does the supplier do on their VAT return?

Nothing in box 1. The sale goes in box 6 as a net value and no output tax is declared, because the customer declares it instead.

The customer accounts for the output tax in box 1 and, where they can recover it, the same figure as input tax in box 4, which is usually cash-neutral to them.
A supplier whose sales are mostly reverse-charged often moves into a repayment position, and monthly returns can be worth asking for.
The reverse charge also disqualifies a supply from the Flat Rate Scheme, which catches a lot of small subcontractors.

This tool decides whether the charge applies. It does not complete a return, and the Flat Rate consequence is worth an accountant’s five minutes.

Common questions

Does the VAT reverse charge apply to my invoice?: It applies when six conditions are all met: the work is within the scope of CIS, the supply is standard-rated or reduced-rated, both supplier and customer are VAT registered, the customer is CIS registered as a contractor, and the customer is not an end user or intermediary supplier. If any one fails, charge VAT in the normal way.
Does the reverse charge apply to zero-rated work?: No. Zero-rated supplies, which include most new-build housing, are outside the domestic reverse charge. The supplier invoices at the zero rate as usual.
What is an end user for the VAT reverse charge?: An end user is a customer who receives construction services for their own purposes rather than to sell the work on, typically the business that will keep, occupy or let the finished building. A supply to an end user falls outside the reverse charge, but only where the customer has confirmed their status in writing.
What wording goes on a reverse charge invoice?: The invoice must make clear the reverse charge applies and that the customer is required to account for the VAT. A commonly used form is: “Reverse charge: VAT Act 1994 Section 55A applies. Customer to pay the VAT to HMRC.” The rate or amount of VAT that would have applied is shown for information and is not added to the total.
Who pays the VAT under the reverse charge?: The customer. The supplier charges none and declares the net sale only; the customer accounts for the output tax on their own return and recovers it as input tax where they are entitled to, which is usually cash-neutral to them.
Is this checker legal or tax advice?: No. It applies the conditions published in VAT Notice 735 to the answers you give and names the condition that decides the outcome. It cannot read your contract, and it cannot know whether your customer is an end user. Only your customer can tell you that.

VAT domestic reverse charge checker

Six conditions, and all of them have to hold

When does the reverse charge apply?

What is an end user?

What has to be on the invoice?

What does the supplier do on their VAT return?

Common questions

Reverse charge in Estimark

The reverse charge explained

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For sole traders

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