Domestic reverse charge

[RSmith2.]

We've recently setup a construction company. VAT registration has been applied for but we need to invoice our contractor in the meantime. The reverse charge applies so once we have our VAT number we will be referencing the applicable rate but not charging VAT. I understand I can't reference this until we are registered and have received our VRN. My question is whether I need to reissue those invoices once we have our VRN, for accurate records for us and our contractor. I've read that if we were actually charging VAT, then we could send an initial invoice with the 20% markup, without referencing VAT, so that we're paid what's due (or would be due) following VAT registration, and then we'd need to issue a new VAT invoice. I've also read scenarios where VAT is invoiced separately at a later date. I'm just unclear if the revised invoice is necessary when reverse charge applies, because the amount due is no different.

 

[Ziggy2024]

We've recently setup a construction company. VAT registration has been applied for but we need to invoice our contractor in the meantime. The reverse charge applies so once we have our VAT number we will be referencing the applicable rate but not charging VAT. I understand I can't reference this until we are registered and have received our VRN. My question is whether I need to reissue those invoices once we have our VRN, for accurate records for us and our contractor. I've read that if we were actually charging VAT, then we could send an initial invoice with the 20% markup, without referencing VAT, so that we're paid what's due (or would be due) following VAT registration, and then we'd need to issue a new VAT invoice. I've also read scenarios where VAT is invoiced separately at a later date. I'm just unclear if the revised invoice is necessary when reverse charge applies, because the amount due is no different.

You will need to send revised invoices to show the DRC applied.

Maybe consider a pro-form or payment request with the intention to provide an invoice when the VAT number comes through.