Manage the VAT domestic reverse charge procedure
Want less admin? Xero helps VAT-registered construction businesses follow HMRC rules for the VAT domestic reverse charge procedure. Easily calculate the tax, create invoices with the right wording, and send your domestic reverse charge VAT returns directly to the tax office.
All plans to suit your business
Ignite
for the first 6 months
Then £16 per month
An easy financial foundation - track cash flow with the essentials.
- Send quotes and 20 invoices†
- Accept online invoice payments^
- MTD for Income Tax ready
- Reconcile transactions (optional)
- Auto-reconcile transactions (optional)
- Smart document capture
- View real-time reports
- Enter 10 bills
- Submit VAT returns to HMRC
- Automate subcontractor CIS calculations and reports
- Make online bill and payroll payments (domestic) for £0.20 per payment††
- Payroll for £1.50 per person
- 30 day cash flow forecast
- Visualise performance with basic graphs
Grow
for the first 6 months
Then £37 per month
Go beyond the basics - automate tasks and access performance dashboards.
- Send invoices and quotes
- Accept online invoice payments^
- MTD for Income Tax ready
- Reconcile transactions
- Auto-reconcile transactions (Beta)
- Smart document capture
- View real-time reports
- Automate bill entry and track bills
- Submit VAT returns to HMRC
- Automate subcontractor CIS calculations and reports
- Make online bill and payroll payments (domestic) for up to 5 payments
- Payroll for 1 person
- 60 day cash flow forecast
- Visualise performance with graphs
- Customise performance dashboards
- Claim expenses and mileage for 1 user
Comprehensive
for the first 6 months
Then £50 per month
Optimise profitability - tailor your insights for greater control.
- Send invoices and quotes
- Accept online invoice payments^
- MTD for Income Tax ready
- Reconcile transactions
- Auto-reconcile transactions (Beta)
- Smart document capture
- View real-time reports
- Automate bill entry and track bills
- Submit VAT returns to HMRC
- Automate subcontractor CIS calculations and reports
- Make online bill and payroll payments (domestic) for up to 10 payments
- Payroll for 5 people
- 90 day cash flow forecast
- Visualise performance with graphs
- Customise performance dashboards
- Claim expenses and mileage for 5 users
- Use multiple currencies
- Tailored financial health scorecards
- Make online bill payments (International) - Optional add-on
Ultimate
for the first 6 months
Then £65 per month
Future proof your scaling business - with advanced tools and analytics.
- Send invoices and quotes
- Accept online invoice payments^
- MTD for Income Tax ready
- Reconcile transactions
- Auto-reconcile transactions (Beta)
- Smart document capture
- View real-time reports
- Automate bill entry and track bills
- Submit VAT returns to HMRC
- Automate subcontractor CIS calculations and reports
- Make online bill and payroll payments (domestic) for up to 15 payments
- Payroll for 10 people
- 180 day cash flow forecast
- Visualise performance with graphs
- Customise performance dashboards
- Claim expenses and mileage for 10 users
- Use multiple currencies
- Tailored financial health scorecards
- Make online bill payments (International) - Optional add-on
- Track time and costs for projects for 10 users
- Analyse KPIs and ratios
- Benchmark against the industry
Automate VAT calculations
The VAT rules can get complicated, so let Xero do all the VAT calculations for you! Swap a time-consuming manual job for a slick process that saves you worrying about compliance risks.
Here’s some HMRC VAT reverse charge guidance
Help your customers digest their invoices
Xero shows the VAT rate next to each item on an invoice, and informs your customer of their obligations under the VAT domestic reverse charge procedure. This way, your customers have no trouble understanding the financial admin – and can go ahead and pay you!
Send VAT returns directly
When it’s time for your tax reporting, Xero automatically fills in your VAT returns using data from your accounting records. Just double-check the info and then send returns directly to HMRC. Done!
FAQs on Xero’s VAT domestic reverse charge software
HMRC introduced the VAT domestic reverse charge procedure to reduce fraud in supply chains in the construction industry. Instead of the seller charging and collecting the VAT, the buyer accounts for the VAT directly with HMRC. This cuts out the middleman.
HMRC introduced the VAT domestic reverse charge procedure to reduce fraud in supply chains in the construction industry. Instead of the seller charging and collecting the VAT, the buyer accounts for the VAT directly with HMRC. This cuts out the middleman.
Generally speaking, the rules apply to VAT-registered construction businesses that supply services to other UK VAT-registered businesses under the Construction Industry Scheme (CIS). The rules don’t apply to supplies for end users (like homeowners) or non-VAT-registered customers.
Generally speaking, the rules apply to VAT-registered construction businesses that supply services to other UK VAT-registered businesses under the Construction Industry Scheme (CIS). The rules don’t apply to supplies for end users (like homeowners) or non-VAT-registered customers.
Xero clearly displays the VAT domestic reverse charge wording on invoices, including which items are subject to this reverse charge and the VAT rates. This helps customers understand both their tax obligations and what they owe you.
Xero clearly displays the VAT domestic reverse charge wording on invoices, including which items are subject to this reverse charge and the VAT rates. This helps customers understand both their tax obligations and what they owe you.
Yes! Subcontractors can use Xero to apply the VAT domestic reverse charge wording and correct VAT rates to their invoices. Contractors can calculate VAT figures accurately and keep up-to-date records for HMRC. When you work as both a contractor and a subcontractor, Xero gives you a single place to organise all your tax records.
Yes! Subcontractors can use Xero to apply the VAT domestic reverse charge wording and correct VAT rates to their invoices. Contractors can calculate VAT figures accurately and keep up-to-date records for HMRC. When you work as both a contractor and a subcontractor, Xero gives you a single place to organise all your tax records.
Absolutely. Xero automatically pulls data from your accounting records to prepare your VAT returns following the Making Tax Digital (MTD) guidelines. Just review the info and then submit returns directly to HMRC from within Xero.
Absolutely. Xero automatically pulls data from your accounting records to prepare your VAT returns following the Making Tax Digital (MTD) guidelines. Just review the info and then submit returns directly to HMRC from within Xero.
Get one month free
Purchase any Xero plan, and we will give you the first month free.
