Apologies if this has been already posted (I did try searching, but didnt find anything), but I am wondering if the VAT reverse charge should be applied to invoices for materials only, raised by a CIS subcontractor? The VAT Reverse charge is applied to sales invoices where a subcontractor is both CIS and VAT registered, when either labour, or both labour and materials are provided, however, I can't find anything about whether it should be applied when only materials are provided by the CIS and VAT registered subbie - can anyone please advise, rather than sitting on hold to HMRC for an hour!
The only info I can find relates to when either labour, or labour and materials are provided, and nothing relates to just materials being provided. I have been advised previously by HMRC that a Materials-only invoice should not be reported under CIS, so I am thinking the same would follow under the new Reverse Charge system ie VAT charged as normal as it isnt both VAT and CIS related?
(I did try searching, but didnt find anything), but I am wondering if the VAT reverse charge should be applied to invoices for materials only, raised by a CIS subcontractor? The VAT Reverse charge is applied to sales invoices where a subcontractor is both CIS and VAT registered, when either labour, or both labour and materials are provided, however, I can't find anything about whether it should be applied when only materials are provided by the CIS and VAT registered subbie - can anyone please advise, rather than sitting on hold to HMRC for an hour!
The only info I can find relates to when either labour, or labour and materials are provided, and nothing relates to just materials being provided. I have been advised previously by HMRC that a Materials-only invoice should not be reported under CIS, so I am thinking the same would follow under the new Reverse Charge system ie VAT charged as normal as it isnt both VAT and CIS related?
Thanks in advance!
Gill
Most folk are gone
-- Edited by BMM on Tuesday 11th of May 2021 04:47:17 PM
Are the materials part of a future supply of labour and materials if so then charge VAT?
Or are they just 'getting' the materials for the contractor in which case it could be classed as a disbursement,
I always include material only invoices on the CIS return as I do not see why you wouldn't if already set up and I always advise to charge VAT on the materials, whether the sub-contractor wishes to reduce the invoice by the VAT amount so no mark up that is up to them, so if not a disbursement then VAT charged under the DRC as long as the contractor is not the end user.
__________________
Doug
These are only my opinions of how I see things and therefore should not be taken as advice
Thanks Doug - no, the materials were a one-off on this occasion, so will advise to charge vat as normal, and not subject to Reverse Charge. Thank you - thats really helpful.
