VAT Reverse Charge for Subcontractors supplying Fire Alarms and Building Fire Protection

Where a Subcontractor is supplying and installing a Fire Alarm this this not considered an operation covered by CIS there for the VAT Reverse Charge does not apply. Where a Subcontractor is providing work which is providing Fire Protection for the actual building this is classed as an operation covered by CIS there for the VAT Reverse does apply. What if a Subcontractor if providing us with work that covers all of the above? Can we apply 20% VAT to the Fire Alarm payment and apply the VAT Reverse Charge to the Fire Protection payment? Or should we apply the VAT Reverse charge to ALL of their payments?

https://www.gov.uk/guidance/vat-reverse-charge-technical-guide#construction-services-supplied-with-goods-or-other-services Have a read of the technical guide, section titled " Construction services supplied with goods or other services", otherwise, if there is an element that is CIS and an element that is not CIS, the whole supply falls under reverse charge (as a simplification/make mixed supplies easier to deal with). Also note in the same section the topic of splitting a contract between services/labour and materials only.

Hi,

The guidance states:

Normally if any of the services in a supply are subject to the reverse charge, all other services supplied will be also. If the reverse charge part of the supply is 5% or less of the whole supply value this can be disregarded (this is referred to as the ‘5% disregard’). Normal VAT rules will apply if the customer makes an end user or intermediary supplier notification.

The 5% disregard applies wherever there is a single supply of construction services and only one minor element of the supply would fall under the reverse charge such as in ‘supply and fix works’.

Supply and fix works will normally be subject to the reverse charge because the services and goods are part of one supply of construction services for VAT purposes. However, if the value of the service element is 5% or less, the 5% disregard can apply and VAT can therefore be accounted for under normal rules. For example, a joiner constructing a staircase offsite, then installing it onsite, will be making a reverse charge service unless the value of the charge for installation is 5% or less of the overall charge.

Thank you.