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Domestic Reverse Charge (DRC)

Are you a VAT-registered business in the UK construction industry? If so, Domestic Reverse Charge (DRC) is an important topic you need to be aware of! Don’t worry, we're here to help!

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What You Need to Know about Domestic Reverse Charge

Domestic Reverse Charge is a VAT mechanism introduced by HMRC to combat VAT fraud within the construction sector. It shifts the responsibility for paying VAT from the supplier to the customer in certain transactions, affecting how VAT is accounted for in the supply chain.

Scope

Under the Domestic Reverse Charge (DRC) rules, only services falling within the scope of CIS are affected. This implies that DRC is applicable to specific construction services, including building construction, painting, decorating, heating installation, and more.

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The Change

Until March 2021

A subcontractor (builder) providing services and building materials to a contractor (construction firm) is required to include VAT charges and report the VAT to HMRC through their VAT return submission.

After March 2021

When a subcontractor (builder) provides services to a contractor (construction firm), the contractor is responsible for declaring the VAT due on their VAT return and reclaiming it as per the normal VAT rules.

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Showing Domestic Reverse Charge in VAT Return

If you buy services subject to the reverse charge, you must handle the VAT accounting in the following manner:

Box 1: Enter the VAT charged on reverse charge purchases as output tax.
Box 4: If you are eligible to claim VAT on reverse charge purchases, enter the same amount in Box 4.

Suppliers who provide services under the reverse charge should not include any output VAT on sales in Box 1. Instead, they need to enter the net sales amount in Box 6 of the VAT return.

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Why Choose us for your VAT Compliance?

We are specialist accountants and tax advisers for your property business! The service delivered by our qualified and experienced team is tailored as per your needs. Our accomplished tech-embedded service with exceptional property tax insight makes us stand out from the rest.

Expertise

Our experienced professionals possess in-depth knowledge of VAT regulations and filing requirements, staying updated to ensure accurate and compliant VAT returns.

Tailored Solutions

We understand the uniqueness of every business and tailor our approach to ensure your VAT return accurately reflects your activities and optimises your VAT position.

Compliance Assurance

With us, you can have peace of mind knowing that your VAT return will be prepared in full compliance with HMRC guidelines.

Timely Filing

By choosing our services, you minimise the risk of late or incorrect filings, helping you avoid penalties and potential legal issues.

Proactive Tax Planning

We go beyond just filing your VAT return. We offer proactive tax planning advice to help optimise your tax strategies, and ensure you are benefitting from available tax reliefs.

Competitive Pricing

Our services deliver exceptional value, offering competitive pricing without compromising on the expertise and quality we provide to meet your accounting needs.

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How We Work

Experience seamless VAT compliance with us. Our expert team guarantees efficiency, accuracy, and compliance every step of the way. Trust us to handle your VAT return with precision and professionalism, while you focus on your business's success.

Initial Consultation

We conduct an initial consultation to gather relevant information about your business ensuring a clear understanding of your specific VAT return requirements.

Data Collection

We collect all necessary financial data for your VAT return, including sales invoices, purchase receipts, and relevant VAT records.

VAT Calculation and Reporting

We calculate your VAT liability while ensuring proper accounting for eligible deductions, and allowances, in the preparation of your VAT return.

Review and Finalisation

We conduct a thorough review to ensure compliance with HMRC guidelines, addressing any potential issues for your VAT return.

Submission and Filing

Upon your review and approval, we submit VAT return on your behalf, ensuring that your VAT return is filed within the specified deadline.

Ongoing Support

Our commitment goes beyond just preparing and filing VAT return. We provide ongoing support, including tax planning and addressing VAT queries throughout the year.

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Here is our awesome team

At UKPA, it is done by a team of people evolved from different walks of life. Trained and experienced in property and real estate tax, accounting and compliance matters, most of them are qualified as Chartered Accountants, Chartered Tax Advisers or Chartered Financial Analyst.

Raju Gajurel

CEO

Raju Gajurel is a qualified chartered accountant and chartered tax adviser with more than 22+ years’ experience in accounting, finance and taxation.

Srijan Gautam

Manager

Srijan is a Chartered Accountant with over 6 years of expertise in accounting, valuations, and taxation.

Prasun Shrestha

Senior Associate

Prasun is a Chartered Accountancy student with strong analytical and problem-solving skills, experienced in dealing with UK clients.

Merisha Shrestha

Senior Associate

Merisha holds an Association of Chartered Certified Accountant (ACCA) degree with over 5 years of experience in auditing, accounting and compliance fields.

Domestic Reverse Charge (DRC)

Testimonials

What You Need to Know about Domestic Reverse Charge

Scope

The Change

Showing Domestic Reverse Charge in VAT Return

Why Choose us for your VAT Compliance?

Expertise

Tailored Solutions

Compliance Assurance

Timely Filing

Proactive Tax Planning

Competitive Pricing

How We Work

Initial Consultation

Data Collection

VAT Calculation and Reporting

Review and Finalisation

Submission and Filing

Ongoing Support

Here is our awesome team

Trust UK Property Accountants to Optimise Returns and Minimise Hassles!