Reverse Charge for Construction Services - intermediary suppliers

Where our construction company (wholly owned ALEO) provides building or construction works to the Council, would the normal VAT treatment continue to apply by virtue of the construction company and council being part of the same corporate group?

Similarly, if the construction company does work on tenant houses for a housing association, would this be a supply to intermediary supplier on basis that the landlord and tenant both share an interest in the land, and so normal VAT rules continue to apply?

Parents
  • Yes, a local authority and its wholly owned company are 'connected' for the purposes of the construction reverse charge so mutual supplies of construction works remain subject to 'normal' VAT accounting treatment..... 

    On the second question I think possibly yes but that depends on the customer  -  the housing association  -  procuring the construction works for the benefit of its tenants.

    REMEMBER, on both these points you need to consider (i) the VAT treatment of the procurement of the construction works by the company, which is determined by the company's intention to consume the works or supply them on to another party, and (ii) the VAT treatment of the supply of the construction works by the company, which is determined by the customer's intention to consume the works or supply them on to another party...

Reply
  • Yes, a local authority and its wholly owned company are 'connected' for the purposes of the construction reverse charge so mutual supplies of construction works remain subject to 'normal' VAT accounting treatment..... 

    On the second question I think possibly yes but that depends on the customer  -  the housing association  -  procuring the construction works for the benefit of its tenants.

    REMEMBER, on both these points you need to consider (i) the VAT treatment of the procurement of the construction works by the company, which is determined by the company's intention to consume the works or supply them on to another party, and (ii) the VAT treatment of the supply of the construction works by the company, which is determined by the customer's intention to consume the works or supply them on to another party...

Children
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