[ VAT Accountants London ]
VAT Accountants London
Construction VAT has its own rules — standard rate on most work, reduced rate on certain residential conversions, and the domestic reverse charge for subcontractors. We handle registration, returns and scheme selection so you stay compliant and cashflow-positive.
Registration
Right scheme, right time
Returns
Filed accurately each quarter
Flat rate
Reviewed for your margins
Reverse charge
CIS-VAT handled correctly
VAT on construction is more complex than almost any other sector. Most work is standard-rated at 20%, but certain residential conversions and renovations qualify for the reduced rate of 5%, and new-build dwellings can be zero-rated. On top of that, the domestic reverse charge for construction services means that subcontractors receiving payments from contractors account for VAT without the contractor actually charging it — a rule that has caught many construction businesses off guard since it was introduced.
We help construction businesses choose the right VAT scheme. The standard scheme lets you reclaim VAT on purchases, which matters if you buy a lot of materials. The flat-rate scheme charges a lower percentage on your turnover (typically 8–10% for construction) but does not allow input VAT recovery — it suits businesses with low material costs and high labour content. We review your actual figures and recommend the scheme that saves you the most.
We also handle the quarterly return cycle, reconcile CIS and VAT on every subcontractor payment, and make sure the reverse charge is applied correctly where it should be. Getting VAT wrong is expensive — HMRC charges interest and penalties on errors, and the reverse charge mistakes can be particularly costly — so we make sure it is done right.
[ What We Handle ]
VAT Accountants London — the full scope.
- ◢VAT registration and scheme selection
- ◢Quarterly VAT returns prepared and filed
- ◢Flat-rate scheme reviews for construction
- ◢Domestic reverse charge for construction subcontractors
- ◢Standard vs reduced rate guidance on residential work
- ◢CIS and VAT reconciliation on subcontractor payments
[ Frequently Asked Questions ]
VAT Accountants London — your questions answered.
When does a construction business need to register for VAT?
You must register for VAT when your turnover exceeds £90,000 in any rolling 12-month period. You can also register voluntarily if your turnover is below the threshold, which can be beneficial if you have significant VAT on purchases to reclaim. We will advise on the right timing for your business.
Should I use the flat-rate or standard VAT scheme?
The standard scheme lets you reclaim VAT on purchases and suits businesses with high material costs. The flat-rate scheme charges a lower percentage on your turnover (typically 8–10% for construction trades) but does not allow input VAT recovery, suiting businesses with high labour content and low material costs. We review your actual figures and recommend the scheme that saves you the most.
What is the construction VAT reverse charge?
The domestic reverse charge for construction services means that when a subcontractor invoices a contractor, the subcontractor does not charge VAT — instead, the contractor accounts for the VAT on their own VAT return. This eliminates the cashflow advantage of charging and reclaiming VAT between construction businesses. We make sure it is applied correctly on every relevant transaction.
What VAT rate applies to residential construction?
Most construction work is standard-rated at 20%. However, certain residential conversions and renovations qualify for the reduced rate of 5%, and new-build dwellings can be zero-rated. The rules are complex and depend on the type of property and the nature of the work. We will confirm the correct rate for each project.
What happens if I get my VAT return wrong?
HMRC charges interest on underpaid VAT and can issue penalties for errors, especially if they are careless or deliberate. The reverse charge mistakes can be particularly costly because they affect both the contractor and subcontractor. We file your returns accurately and reconcile CIS and VAT on every subcontractor payment to prevent errors.
Ready to talk to a specialist?
Book a free financial site review and we'll review your CIS, tax and accounts — no obligation.