The Construction Industry Scheme (CIS) VAT reverse charge applies to construction services from 1 October 2020. This is an 'At a glance' freeview guide.

Subscribers click on Construction Industry Scheme reverse charge your detailed version of this guide with worked examples, templates and client questionaires.

At a glance guide

The chancellor confirmed that the CIS VAT domestic reverse charge measure will apply to supplies of construction work from 1 October 2020.

The start date was due to be 1 October 2019 however on 6/9/2019 HMRC announced a year's delay due to Brexit and the fact that so few people were ready for the change.

 Key conditions:

Apply the reverse charge when all the following are met:

The CIS reverse charge does not apply to any of the following supplies:

The CIS reverse charge does not apply to taxable supplies made to the following customers:

The aim of the measure is to reduce VAT fraud in the construction sector.

It will require a significant change of approach in many CIS businesses:

Example: how the CIS reverse charge works

John the Roofer (who is VAT registered) supplies the materials and roofs a new office building for Contractor who (who is also VAT registered) and in turn supplies its contruction services to Developer (also VAT registered). Developer finds and develops land and will in this case, bring the build to completion and supply a finished commercial building to Enduser, its client.

From October 2020, under the new CIS reverse charge mechanism, he invoices £100,000. His invoice states that "the CIS reverse charge applies" (see invoicing requirements in subscriber guide: Construction Industry Scheme reverse charge ) and that the applicable rate of VAT is 20%.

What services are within the CIS reverse charge?

Excluded services

Certain services can become included:

HMRC example

Treatment of existing contracts to be ready for 1 October 2020

The VAT treatment is determined for payments due on any supplies entered into your accounting system before 1 October 2020, but paid on or after 1 October 2020.

Date entered in customer’s accounting systemDate payment madeVAT Treatment
Before 1 Oct 2020 On or before 31 Dec 2020 Normal VAT rules
Before 1 Oct 2020 On or after 1 January 2021 Domestic reverse charge
On or after 1 Oct 2020 On or after 1 Oct 2020 Domestic reverse charge


For contracts starting after 1 October 2020 you should decide whether the reverse charge applies from the start of the contract.

VAT schemes

VAT Payment


When supplying a service subject to the CIS reverse charge, suppliers must show all the information that is normally required on a VAT invoice, except that:

Under the VAT Regulations 1995 invoices for services subject to the reverse charge where the customer is liable for the VAT must include the reference ‘reverse charge’. Here are some examples of wording that meet the legal requirement:

Useful links

Construction Industry Reverse Charge
Detailed guide for subscribers