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United KingdomVAT & Corporate TaxUpdated: Sep 13, 2026
Validation Pending: The capabilities described for United Kingdom are currently under review. Prefiler does not yet offer production-validated automated pre-filing intelligence for this jurisdiction.
Direct Answer
Under the CIS reverse charge, the sub-contractor does not charge VAT on their invoice. The main contractor accounts for both the input and output VAT. Bank payments to the sub-contractor will therefore be for the net amount only.
Reconciling the Bank
If you are the sub-contractor, your invoice might be £1,000 + 20% VAT. However, the invoice must state "Reverse charge applies". The bank receipt will be exactly £1,000. You report the £1,000 in Box 6 of your VAT return, but £0 in Box 1.
Preventing Audit Failures
Ensure your accounting software is mapped correctly. If a sub-contractor accidentally applies standard VAT, the main contractor will underpay them, causing a bank reconciliation mismatch that flags in HMRC's MTD systems.