The VAT domestic reverse charge for decorators in 2026

Your trade is always in scope, so the question is which customer you are invoicing. A homeowner having their own house painted is outside it, because they are not VAT registered. A VAT and CIS registered contractor selling your work on is inside it. Inside it you invoice without VAT and say so on the invoice.

The reverse charge has been in force since 1 Mar 2021; the GOV.UK VAT registration threshold of £90,000, as of Jul 2026. All figures as at 8 Sep 2026.

Does the reverse charge apply when you invoice a homeowner for their own house?

No. HMRC’s VAT reverse charge technical guide says the reverse charge does not apply where services are provided to a private domestic customer, because that customer will not be VAT registered.

The sting sits in the same guidance, and it is the line that gets missed, because it arrives after the answer most decorators were looking for. HMRC says doing that homeowner work does not make you an end user, because you are still making onward supplies of construction services, so supplies made to you by subcontractors are still subject to the reverse charge if the other conditions are met. Four cases cover most of a decorator’s week, and the customer decides each one.

Sources: HMRC's VAT reverse charge technical guide, updated 18 Sep 2024, and HMRC's VAT Notice 735, updated 13 Mar 2026, accessed September 2026.

Does the reverse charge apply to painting and decorating?

Yes, and the trade is named in the statute, so there is no border case to argue. The chain is short: an Act, an Order, and a line naming the trade. Section 55A of the VAT Act 1994 makes the recipient, not the supplier, account for and pay the tax on the supply. The 2019 Order (SI 2019/892), made 29 Apr 2019, applies that to construction services. Article 5(e) of the 2019 Order includes within construction services painting or decorating the internal or external surfaces of any building or structure. GOV.UK’s own guidance carries the same scope.

The service list is familiar. GOV.UK says the reverse charge service list is the same as the CIS construction operations list, except for supplies of workers provided by employment businesses. One exclusion is worth carrying: article 6(e) of the 2019 Order excludes the professional work of consultants in interior or exterior decoration. The man advising on the scheme is out. The man with the brush is in.

What has to be true before you reverse charge an invoice?

Five things, and all five at once. GOV.UK sets them out on the supplier side.

Source: GOV.UK, How to use the VAT domestic reverse charge if you supply building and construction services, updated 24 Sep 2020, accessed September 2026.

Two of those are checks rather than assumptions. GOV.UK says that before applying it you must check that the customer has a valid UK VAT number and is CIS registered; what CIS registration means for a decorator is in the CIS guide. GOV.UK also warns that the CIS check can return a false negative, and its answer where it does is to ask the customer to confirm they are reporting under CIS before applying the reverse charge.

The rate does its own work. Zero-rated supplies are outside it, because section 55A of the VAT Act 1994 applies only to a taxable but not zero-rated supply. HMRC says the reduced rate reaches a decorator on two named job types: refurbishment or renovation of residential premises empty for more than 2 years, and conversion of premises from non-residential to residential use or works changing the number of dwellings.

A decorator who is not VAT registered has none of it on his sales, because GOV.UK writes the condition list for a VAT registered supplier.

What is an end user, and do you take the customer’s word for it?

An end user is defined by what they do with your work, and no, you need it in writing. HMRC’s VAT reverse charge technical guide defines an end user as a business, or group of businesses, that are VAT and CIS registered and do not make onward supplies of the building and construction services they receive. Building contractors are not usually end users, HMRC says, because they make onward supplies. HMRC puts intermediary suppliers alongside them: VAT and CIS registered businesses connected or linked to end users that re-supply the services without making material changes.

The status is optional and it runs on paper. HMRC says the customer must tell the supplier in writing, and only once that notification is made can the supplier stop applying the reverse charge. The 2020 amending Order (SI 2020/578) makes it statutory: confirmed in writing no later than the time the supply is made, or supplied under a written agreement containing that confirmation. HMRC’s suggested wording is published for the customer to use.

Silence is not a notification. HMRC says that where you believe your customer is an end user but they have not notified you in writing, apply the reverse charge rather than normal VAT rules, if the customer is VAT and CIS registered. Where a notification is not made correctly, HMRC says the customer is liable for accounting for the VAT that should have been charged. HMRC also says you may put a line in your terms and conditions assuming end user or intermediary status unless the customer says otherwise, which puts the responsibility on them to respond.

What does your invoice have to say?

Four things, and HMRC treats the wording as seriously as the figures. HMRC’s VAT reverse charge technical guide sets the duties out for the supplier.

Source: HMRC's VAT reverse charge technical guide, updated 18 Sep 2024, citing the VAT Regulations 1995, accessed September 2026.

HMRC’s own examples give three forms of words: “VAT Act 1994 Section 55A applies”, “S55A VATA 94 applies”, and “Customer to pay the VAT to HMRC”. The line items above that wording, and how the price behind them was built, are in the pricing guide.

How does it go on your VAT return?

Four boxes, and which of them you touch depends on which end of the invoice you are standing at. HMRC’s VAT Notice 735 sets out both sides, supplier and customer, on the same four boxes. The numbers are the ones already on the invoice; what changes is whose return they land on.

Source: HMRC's VAT Notice 735, updated 13 Mar 2026, accessed September 2026.

What does it do to your cash flow?

It changes what lands in the account without changing what you earn. HMRC’s VAT reverse charge technical guide puts it directly: as a subcontractor your customers will not be paying you VAT, which reduces the gross value of payments coming into your business, and HMRC says to consider and plan for the impact on day-to-day cash flow.

The structural end follows. HMRC says the reverse charge may mean your business makes net repayment claims to HMRC, because you will not receive VAT on payments from your customers. HMRC’s own remedy is one line: you can apply to move to monthly returns using your online VAT account. GOV.UK lists checking how it will affect your cash flow as one of three things to do if the reverse charge applies to you.

HMRC states the cash-flow effect but publishes no figure alongside it. The amount is the VAT you used to collect and hold between invoicing and your return, on your own reverse charge work. It was never your money. It used to sit in your account on the way out; now it does not arrive.

Does it change what CIS takes off you?

No, and the reason is that the CIS deduction was never calculated on the VAT. HMRC’s Construction Industry Scheme Reform manual says that where a payment to a subcontractor is subject to VAT, the amount from which the deduction is made is the payment exclusive of VAT, so the reverse charge does not change the CIS deduction.

The two get confused because they land on the same payment. They do different jobs. HMRC’s position is that CIS deducts on account of the subcontractor’s own income tax and National Insurance, and the reverse charge moves the VAT accounting to the customer. They also read a job differently: HMRC says the single supply concept applies only to VAT and not to CIS, so each order is looked at separately under CIS rules. Where contractor or subcontractor status is the question, HMRC points readers to CIS340.

What happens if you get it wrong?

Which way you got it wrong decides who pays. HMRC’s VAT Notice 735 says that if you incorrectly charge VAT when the reverse charge should have been applied, your customer is assessed for the output tax, you have to credit the customer with the VAT and return any money collected as VAT, and the normal error correction procedures and possibly penalties follow.

The other direction lands on you. HMRC says that if you apply the reverse charge incorrectly, or have not taken enough steps to check the credentials of your customer, you are liable to pay the output tax on the sale. Two protections sit against that. HMRC says that if you took enough steps to check your customer but were deliberately misled by them, you will not be required to account for output tax on the sale. And that if you correctly applied the reverse charge, you will not be asked to account for output tax if your customer does not.

Correction runs on the ordinary machinery. HMRC’s VAT Notice 735 says mistakes under the reverse charge procedure are dealt with in a similar way to other errors involving VAT. HMRC’s VAT Notice 700/45 says an error may be corrected on the current return where its net value does not exceed £10,000, or is between £10,000 and £50,000 and does not exceed 1% of the box 6 declaration, and HMRC puts the correction window at 4 years from the end of the accounting period in which the error occurred.

When did this start, and has anything changed since?

HMRC dates the construction reverse charge from 1 Mar 2021, and it took two deferrals to get there. The 2019 Order was originally due to start on 1 Oct 2019. SI 2019/1240, made 5 Sep 2019, deferred it to 1 Oct 2020. SI 2020/578, made 8 Jun 2020, deferred it again to 1 Mar 2021 and added the written-confirmation requirement.

One statement from the start of the rules carries its own limit. HMRC said it would apply a light touch in dealing with errors made in the first 6 months of the new legislation, where the business was trying to comply and acted in good faith, and that penalties would only be considered where a business was deliberately taking advantage of the measure.

Two things say the construction position has not moved since. HMRC’s technical guide change log records no 2025 or 2026 entry; its last three changes are dated 18 Sep 2024, 9 Dec 2022 and 18 Nov 2022. And the most recent update to HMRC’s VAT Notice 735, on 13 Mar 2026, added a section on electric vehicle charging and changed nothing about construction.