How reverse charge basis works step by step for subbies working on sites ?
Step 1 :
The charge for services by a sub-contractor does not include VAT.
Step 2:
The VAT registered sub-contractor issues an invoice to the principal
contractor, which shows all the same information as appears on a VAT
invoice, except the VAT rate and VAT amount. The invoice should include the
VAT registration number of the sub-contractor.
Step 3:
The invoice from the sub-contractor should also contain the statement ‘VAT on this supply to be
accounted for by the principal contractor’.
Step 4:
The principal contractor pays the sub-contractor for the services. This
payment should not include VAT.
Step 5:
If RCT is to be deducted by the principal contractor, it should be calculated on
the VAT-exclusive amount.
Step 6:
The principal contractor should include the VAT on the services received from
the sub-contractor in Box T1 of its VAT return for the period in which the
supply is made and claim input credit for same in the Box T2
Step 7:
The sub-contractor should put in Zero in the Box T1 of its VAT return for the period and claim vat on inputs on the said job in Box T2
Any queries on the above give me a call on 091 763817 or email me at oliver@taxreturnhelp.ie