Reverse Charge Vat
Glossary
Reverse Charge VAT
Reverse Charge VAT is a UK accounting mechanism where the customer (rather than the supplier) accounts for the VAT on a transaction, used mainly in cross-border services and the domestic construction industry.
Two main UK use cases: (1) cross-border B2B services from overseas suppliers — the UK customer self-accounts for output VAT and reclaims input VAT on the same return (usually net-nil cash impact); (2) the Domestic Reverse Charge for construction services, introduced March 2021, where main contractors invoice net of VAT and the recipient accounts for it. Failure to apply reverse charge correctly is a common source of HMRC VAT assessments.
Rajoka Insights
Operating notes from a UK house of brands.
A weekly note from Mehmood. House-of-brands strategy, UK operating, and what's working across the portfolio. No fluff.
Delivered via Substack. Unsubscribe anytime.
Explore Rajoka
A family of firms. One operating standard.
Pick a brand, pick a stage, or tell us your problem.