What wording must go on a reverse charge invoice?

Your invoice must make clear the reverse charge applies and that the customer accounts for the VAT. Wording like "Reverse charge: customer to pay the VAT to HMRC" does the job. You must also show the VAT rate and the VAT amount the customer must account for, but not add that VAT to the total you are charging.

What if my customer says they're an end user?

If the customer confirms in writing that they are the end user, the reverse charge does not apply and you invoice with VAT as normal. Always get that end-user statement in writing - an email is fine - and keep it. If HMRC ever queries why you charged VAT normally, that written confirmation is your protection.

Should I stay on the Flat Rate Scheme under the reverse charge?

Probably not, if most of your work is reverse-charge sales to contractors. Reverse-charge sales are excluded from your Flat Rate Scheme turnover, so the scheme stops working in your favour - you lose the simplicity benefit but keep the restrictions on reclaiming input VAT. Many sub-contractors are better off leaving the FRS. Run the numbers with your accountant.

domestic reverse charge vat explained

Domestic Reverse Charge VAT Explained for Solo Sub-Contractors

Q: Do I charge VAT on invoices to a main contractor?

Usually not, if the domestic reverse charge applies. When the work is caught by CIS, both of you are VAT-registered and the contractor is not the end user, you charge no VAT. Instead your invoice shows the VAT rate and the amount the contractor must account for, and they pay that VAT straight to HMRC through their own return.

By Eddie · 2 April 2026 · 5 min read

If you're a VAT-registered sub-contractor invoicing a VAT-registered main contractor for CIS work, you usually charge no VAT at all - the contractor accounts for it instead. That's the domestic reverse charge, in force since 1 March 2021. Get the invoice wording right and it's a non-event; get it wrong and your invoice bounces back from their accounts team and payment stalls.

What the domestic reverse charge actually is

HMRC brought it in to stop VAT fraud in construction supply chains. Instead of you charging VAT, collecting it and paying it over, the responsibility shifts to your customer: the main contractor accounts for the VAT directly on their own VAT return. You invoice the net amount only.

You still show the VAT rate and the VAT amount on the invoice - you just don't add it to what the contractor owes you. That trips a lot of people up, so it's worth being precise.

When the reverse charge applies

All four of these must be true:

The work is a construction service caught by CIS (wiring, plumbing, plastering, groundworks and so on)
You are VAT-registered
Your customer is VAT-registered
Your customer is not the end user - they are selling the construction service on, not consuming it

When it doesn't apply

Domestic customers - homeowners get normal VAT invoices
Customers who confirm in writing they are the end user (a business having its own premises built, for example)
Either party not VAT-registered
Zero-rated work, such as some new-build housing

Exactly what to put on your invoice

A reverse charge invoice needs everything a normal VAT invoice needs, plus a few extras. Run down this list before you hit send:

✓ All the usual details: your business name, address, invoice number, date
✓ Your VAT number
✓ The customer's VAT number
✓ Labour and materials itemised as normal
✓ The VAT rate that applies (usually 20%, sometimes 5%)
✓ The VAT amount the customer must account for - shown, but NOT added to your total
✓ The reverse charge statement, word for word
✓ Total due = net amount only, no VAT included

Reverse charge invoice wording (copy/paste)

INVOICE - [Your business name]
[Your address] - VAT No: [your VAT number]
To: [Contractor name] - VAT No: [their VAT number]
Invoice no: [number]   Date: [date]

Work: [description], [site address]

Labour ................... £1,800.00
Materials ................ £600.00
Total due ................ £2,400.00

Reverse charge: customer to pay the VAT to HMRC.
VAT rate: 20%. VAT to be accounted for by the customer: £480.00.

From the tools: My brother, a spark in Leeds, hit this the hard way when the reverse charge landed. His first invoice to a new main contractor went out with 20% VAT added as usual - their accounts team rejected it, asked for a corrected version, and the £2,300 he was owed sat unpaid for nearly five weeks while it went back and forth. Since then he sends one email before starting any subcontract job asking for the VAT number, CIS status and end-user confirmation, and every invoice carries the reverse charge line. He hasn't had a single invoice bounced in over three years, and his average time-to-paid on contractor work dropped from about 40 days to under 20.

The Flat Rate Scheme trap

If you're on the Flat Rate Scheme, the reverse charge is bad news. Reverse-charge sales are excluded from your FRS turnover, so you get none of the scheme's benefit on that work - but you still can't reclaim most input VAT. Sub-contractors doing mainly reverse-charge work are typically worse off staying on the FRS, and many should leave it and move to standard VAT accounting. Ask your accountant to run your numbers both ways.

Quick answers

Do I charge VAT on invoices to a main contractor?

Not when the reverse charge applies - that's CIS-caught work, both parties VAT-registered, and the contractor not the end user. You show the rate and the VAT amount they must account for, but charge only the net total. The contractor pays the VAT to HMRC themselves.

What wording must go on the invoice?

Something clear and unambiguous, such as "Reverse charge: customer to pay the VAT to HMRC", plus the VAT rate and the amount the customer must account for. The VAT must not be added to the total due.

What if my customer is the end user?

Then the reverse charge does not apply and you invoice with VAT as normal - but only once they have confirmed end-user status in writing. Keep that email with the job records.

Should I stay on the Flat Rate Scheme?

If most of your sales are reverse-charge work, probably not - those sales are excluded from FRS turnover, so the scheme usually leaves you worse off. Many subbies should switch to standard VAT accounting.

This is general information for UK tradespeople, not tax or legal advice. Rules change - check GOV.UK or a qualified accountant for your situation.

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