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Posted Tue, 31 May 2022 14:17:35 GMT by ServileMinion
We have a supplier who provides us with both ready-mixed concrete and operated concrete pumps. When they supply both concrete and the operated pump on the same visit I understand that this doesn't come under CIS or the VAT DRC. On occasions however where they provide operated pump hire but the concrete is supplied by a different supplier I understand that this should come under CIS and therefore VAT DRC. Our supplier however is insisting that CIS and VAT DRC doesn't apply at all and is issuing normal VAT invoices. I have tried to engage with the supplier on multiple occasions but they are refusing to budge. If I amend their invoices to take account of the DRC, withhold the VAT and pay it across to HMRC will this be acceptable to HMRC or should I insist on them providing the correct DRC-compliant invoices?
Posted Tue, 31 May 2022 15:58:13 GMT by HMRC Admin 2

You can find guidance on determining whether a specific supply should come under the reverse charge here:

VAT reverse charge technical guide

Check when you must use the VAT reverse charge for building and construction services

It is the responsibility of the supplier to make sure that a supply is dealt with correctly under the reverse charge. If you account for the reverse charge yourself and then the supplier accounts for the VAT outside of the reverse charge then HMRC will have a payment of VAT which shouldn't be paid. Hence it is important for the supplier and the customer to deal with the transaction in the same way. We would therefore recommend going back to the supplier.

Thank you.
Posted Wed, 01 Jun 2022 08:33:07 GMT by ServileMinion
Thanks for the reply. You've linked to a section in the technical guide relating to "goods on hire only" but my question is specifically about operated hire - concrete pump supplied with an operator, where the pump supplier is not supplying the materials. Please can you confirm definitively whether this is within the Reverse Charge. I can then point my supplier to this answer. Thanks
Posted Wed, 01 Jun 2022 14:26:16 GMT by HMRC Admin 2

We can see from the CIS guidance below that the hire of equipment with an operator is subject to CIS.

CISR14260 - The Scheme: construction operations: plant hire

The reverse charge for construction therefore will be relevant in this situation where the service is subject to CIS based on the following guidelines:

The reverse charge will need to be used when:
  • your customer is registered for VAT in the UK
  • payment for the supply is reported within the Construction Industry Scheme (CIS)
  • the services you supply are standard or reduced rated
  • you’re not an employment business supplying either staff or workers, or both
  • your customer has not given written confirmation that they’re an end user or intermediary supplier
VAT reverse charge technical guide

Thank you.

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