- The Domestic Reverse Charge (DRC) for construction services shifts VAT responsibility from the supplier to the customer.
- The DRC applies to most supplies of building and construction services made to VAT-registered businesses in the UK.
- The DRC does not apply to supplies to non-VAT registered customers, zero-rated services, or supplies to end-users who do not make onward supplies of the construction services.
- The DRC impacts cash flow for subcontractors as they will no longer receive VAT on their invoices.
- Businesses need to update their accounting systems and invoices to reflect the DRC.
- Businesses need to ensure compliance and provide training to employees on the DRC.
Source: claritastax.co.uk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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