Pegasus CIS 5 Reverse Charge VAT - Datasheet

Reverse Charge VAT is a major change to the way VAT is collected in the buildings and construction industry and comes into effect on 1 March 2021. 

It applies to individuals or businesses registered for VAT in the UK where providing or receiving specifies services is reported under the HMRC Construction Industry Scheme (CIS).

Under the new rules, the provision of standard or reduced-rate building services will not be invoiced in the normal way. Under Reverse Charge VAT, the main contractor would account for the VAT on the services of any subcontractor and will have to pay the VAT due to HMRC instead of paying the subcontractors. If the service is zero-rated for VAT, Reverse Charge VAT will not apply.  

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