What wording goes on a reverse charge invoice?

HMRC does not mandate one exact sentence, but the invoice must make clear that the domestic reverse charge applies and that the customer is required to account for the VAT. The wording HMRC gives as acceptable includes "Reverse charge: VAT Act 1994 Section 55A applies", "Reverse charge: S55A VATA 94 applies", "Reverse charge: Customer to pay the VAT to HMRC" and "Reverse charge: This supply is subject to the domestic reverse charge". Pick one and use it consistently.

Do I show the VAT amount on a reverse charge invoice?

You must show the VAT rate that applies and either the amount of VAT or the rate, but you do not charge it and it is not included in the total the customer pays you. The safest presentation is a clearly labelled line showing the VAT rate and the VAT amount the customer must account for, with the invoice total excluding it.

When does the domestic reverse charge apply?

It applies to specified construction services between VAT-registered businesses where the supply is reported under CIS and the customer is not an end user or an intermediary supplier. In short: you are VAT registered, your customer is VAT registered and CIS registered, the work is a specified construction service, and your customer is going to sell the work on rather than consume it themselves.

What is an end user and why does it matter?

An end user is a business that receives construction services for its own purposes rather than to sell on as construction — a property owner having its own building refurbished, for example. The reverse charge does not apply to supplies to an end user, and normal VAT is charged instead. The customer must tell you in writing that they are an end user; if they do not, the reverse charge applies by default.

Does the reverse charge change the CIS deduction?

No. The two schemes run alongside each other. The reverse charge changes who accounts for VAT; CIS still takes 20% or 30% from the labour element and never from materials. On a reverse charge invoice you show no VAT to pay and the contractor still deducts CIS from the labour value.

Is HMRC still taking a light touch on reverse charge errors?

No. The light-touch period that followed the March 2021 introduction has ended and HMRC is actively assessing errors. Separately, from April 2026 HMRC has powers to cancel Gross Payment Status where a business fails to meet its VAT obligations, which raises the cost of getting reverse charge treatment wrong well beyond the VAT itself.

GUIDES

VAT Reverse Charge Invoice Wording: What to Put on the Invoice

The exact wording HMRC accepts on a domestic reverse charge invoice for construction, what else the invoice has to show, and why HMRC is now assessing the mistakes it once let slide.

4 September 2026·6 min read read·By Love Invoicing Team

The domestic reverse charge for construction has been in force since 1 March 2021. Most of the confusion left is not about whether it applies — it is about what you actually type on the invoice. This is that part.

The wording HMRC accepts

There is no single mandated sentence. What the law requires is that the invoice makes clear the reverse charge applies and that the customer has to account for the VAT. HMRC lists these as acceptable:

Reverse charge: VAT Act 1994 Section 55A applies
Reverse charge: S55A VATA 94 applies
Reverse charge: Customer to pay the VAT to HMRC
Reverse charge: This supply is subject to the domestic reverse charge

Pick one and use it on every reverse charge invoice. Mixing wording across invoices is not an error in itself, but it makes a VAT inspection slower than it needs to be.

What else the invoice has to show

The reverse charge line on its own is not enough. The invoice still has to carry everything a VAT invoice normally carries, plus two specifics:

The VAT rate that would have applied — 20% or 5% — and either that rate or the VAT amount the customer must account for.
A total that excludes that VAT. You are not charging it, so the customer does not pay it to you.
Your VAT registration number, and the customer’s.
A description that identifies the supply as a specified construction service.

The clearest layout shows a labelled line — something like “Reverse charge VAT @ 20%: £400.00 (customer to account to HMRC)” — sitting below the net total, with the invoice total equal to the net. A customer who cannot see what to account for is a customer who accounts for nothing.

When it applies, in one paragraph

All of these have to be true: you are VAT registered; your customer is VAT registered; the payment is within the scope of CIS; the supply is a specified construction service at 20% or 5% VAT; and your customer is not an end user or an intermediary supplier. If any one fails, you charge VAT normally.

The end user rule is where the mistakes are

An end user receives construction services for their own purposes rather than to sell on as construction. A developer having its own site built is one. A main contractor billing that developer is not.

The important part is the direction of the default. Your customer has to tell you in writing that they are an end user or intermediary supplier. If they have not, the reverse charge applies. Do not assume end user status because it feels right — get the statement, and keep it with the job.

CIS still runs alongside it

The reverse charge governs VAT. CIS governs income tax on labour. They do not interact. On a reverse charge invoice you charge no VAT, and the contractor still deducts 20% or 30% from the labour element and nothing from the materials. Our CIS deduction calculator handles that split.

Why this matters more than it did

The light-touch enforcement period that followed the 2021 introduction is over, and HMRC is assessing errors rather than correcting them quietly. On top of that, from April 2026 HMRC holds powers to cancel Gross Payment Status where a business fails to meet its VAT obligations. For a subcontractor on gross payment status, a run of wrongly-treated invoices now risks the status itself — which is a cash flow problem an order of magnitude larger than the VAT.

Getting it right without thinking about it

The reliable fix is to make reverse charge a property of the customer rather than a decision you make per invoice. Record which customers are reverse charge and which have given you end user statements, and let the invoice carry the right wording automatically. Love Invoicing handles UK VAT including the reverse charge, so the statement and the excluded total come out of the invoice rather than a memorised sentence.

For the surrounding picture, see VAT, CIS and MTD explained and Making Tax Digital for CIS subcontractors.

Guidance, not tax advice. Wording and rules verified against HMRC guidance in September 2026. Check your own position with your accountant.

Love Invoicing Team

Editorial · Love Invoicing