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T
Tera Watts
March 3, 2025
Question

Domestic reverse charge for CIS for zero VAT

  • March 3, 2025
  • 2 replies
  • 0 views

There are 2 codes 20% RC CIS and 5% RC CIS

If I am right, the 20% RC CIS accounts for sales where 20% VAT standard rate applies and the sale comes under the CIS regulations (20% retained of the labour element).

It follows that 5% RC CIS is for sales where 5% VAT reduced rate applies and again the labour element sees 20% retained.

We have a product which we install and this qualifies for a temporary zero rate of VAT and for some customers CIS applies.

There isn't a 0% RC CIS code or have I missed something. How do I build one from the VAT rates page?

2 replies

J
Jessavell_A
March 3, 2025

Currently, you're unable to create a zero percent RC CIS code for VAT, Tera. I'll provide more details below.

 

When a portion of a service supply is subject to the reverse charge, it affects the entire supply. If any part of the supply that falls under the reverse charge is 5% or less of the total supply value, this can be disregarded, also known as the "5% disregard". This is why there's no 0% Reverse Charge Construction Industry Scheme (RC CIS) code.

 

On the other hand, the system facilitates easy addition of contractors and subcontractors, and automatically calculates CIS deductions based on the entered data.

 

For more detailed guidance on filing, completing, and submitting your return to HMRC through QuickBooks Online, please read this article: Run a VAT 100 report in QuickBooks Online.

 

Please add a response below if you have more questions about RC CIS for zero VAT. We're here to help and address any inquiries you may have.

paul72
paul72
March 4, 2025

does this work or am i locked out@?

paul72
paul72
March 4, 2025

Sorry for the strange message @Tera Watts (in true QB fashion, their forum hasn't worked for me for a few months - I've tried to log in / post but keep getting errors - so was just checking!).

 

Anyway - the start of @Jessavell_A 's post gave me hope that someone (or a bot programmer) at Intuit finally understands CIS.

Then normality prevailed & two vaguely connected ideas were completely misunderstood!

 

In short - there is no RC Zero VAT code as HMRC specifically states that Nil-Rated items are excluded from Reverse Charge (there's no point, I guess).

Where the customer is CIS, enter the products using a CIS Qualifying Product/Service but use the standard Z=0% VAT code.

 

Hope this helps.

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