The following information is for general guidance only and should not be taken as definitive VAT advice, since individual circumstances may vary. To determine the VAT treatment for your particular transactions please refer to HMRC guidance or seek tax advice from an accountant.
If you are VAT registered and make a sale to a VAT registered customer which is subject to the domestic reverse charge, you should not charge the customer VAT as they will need to charge reverse charge VAT. However the net value of the sale needs to be included in Box 6 on your VAT return. Select one of the links below for details of how to enter the sales in VT Transaction+.
Entering sales subject to domestic reverse charge in VT Transaction+
Authenticated tax receipts
If you have used authenticated tax receipts for your sales, rather normal VAT invoices, you can use the REC transaction to record the sales. Select No VAT in the VAT Output field.
Completing your VAT return
As the sub-contractor/supplier, you will not be charging output VAT on the supply. Therefore, no output VAT on the sale should be included in Box 1. of the VAT return. However, the net value of the sale is required to be included in Box 6.
When generating the VAT return, this will occur automatically if you have entered the sales as described in this section.
Sales to non-VAT-registered customers
The domestic reverse charge does not apply to sales made by a subcontractor to a customer who is not VAT-registered or is not liable to be registered for UK VAT. In this case, VAT should be charged in the normal way, by the subcontractor.