Notification of end user or intermediary status can be made: Therefore, the reverse charge will apply to construction services bought in for onward supply. If the design and build company is not a connected party of or linked to an end user, it will not be regarded as an intermediary supplier. This also includes supplies such as scaffolding which are integral to the design and build but are not supplied on.Ī design and build company can be a connected party or linked to an end user and therefore, normal VAT rules would apply to supplies bought in. If the necessary conditions to be an intermediary supplier are met, for the purpose of the reverse charge, the design and build company is not treated as carrying out material alteration or processing of the services it buys in and so can be treated as an intermediary supplier of building and construction services. Under a design and build contract, the design and build company will buy in building and construction services from multiple suppliers and will provide them as a single supply to the client of a designed and built building. Design and build companies as intermediary suppliers Intermediary suppliers can refer to themselves as end users. The reverse charge does not apply to supplies to intermediary suppliers where the intermediary supplier notifies their supplier or building contractor in writing that they’re intermediary suppliers.
be part of the same corporate group or undertaking as defined in section 1161 of the Companies Act 2006.have a relevant interest in the same land where the construction works are taking place, for example, landlord and tenant.To be connected or linked to an end user, intermediary suppliers must either: If intermediary suppliers buy construction services and re-supply them to a connected or linked end user, without making material alterations to the supplies, they’re all treated as if they’re end users and the reverse charge does not apply. Intermediary suppliers are VAT and Construction Industry Scheme registered businesses that are connected or linked to end users. The reverse charge does not apply to supplies to end users where the end user tells their supplier or building contractor in writing that they’re an end user. They’re businesses, or groups of businesses, that are VAT and Construction Industry Scheme registered but do not make onward supplies of the building and construction services supplied to them. End users and Intermediary supplier businesses End usersįor reverse charge purposes consumers and final customers are called end users. If you buy or sell services in the Construction Industry Scheme, you can find more information about it in this guide. Local authorities and other public bodies Change of VAT treatment during a contract Services with reverse charge and normal VAT charging How the domestic reverse charge will affect you Employment businesses supplying construction workers
When to check if your customer is VAT and Construction Industry Scheme registered or an end user End users and Intermediary supplier businesses
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