Reverse Charge on Construction Services

The government is introducing a domestic reverse charge from 1 October 2020 in response to organised criminal attacks on the VAT system within the construction sector. This was originally scheduled for October 2019, but the government announced in September 2019 that it would be delayed.

From October 2010, supplies between sub-contractors and contractors (such as the University subsidiary OUFAL) will be subject to the reverse charge.  However, construction services supplied to an “end user” (such as the University itself) will be unaffected.

A domestic reverse charge means that the customer receiving the supply of construction services must account for the VAT due rather than the supplier.  In turn, the customer deducts the VAT due on the supply as an input, meaning no net tax is payable to HMRC.  This removes the scope to evade any VAT owing to HMRC.

When making a supply to which the domestic reverse charge applies, sub-contractors must annotate the invoice to make clear that the domestic reverse charge applies and that the customer is required to account for the VAT.  The amount of VAT due under the domestic reverse charge should be clearly stated on the invoice but should not be included in the amount shown as total VAT charged.

Please contact the Tax Team for further information

Contact Us

 : Finance Division
       University of Oxford
       23-38 Hythe Bridge Street
       Oxford OX1 2JD


  : 01865 (6) 16215


Tax Glossary