When reverse charge applies to an invoice, the sub-contractor will no longer be charging VAT to their main contractor, therefore the sub-contractor will now be unable to use the VAT they collect as working capital before they pay it to HMRC. Conversely, main contractors may benefit from improved cashflow as they no longer have to pay VAT prior to reclaiming it as purchase VAT. [BCB:90:CIS - Sales:ECB] |