Is this calculator updated for the 2026/27 tax year?

Yes, all calculators are fully updated with the latest HMRC thresholds, personal allowances, and National Insurance rates for 2026/27.

Can I use this for official tax submissions?

These tools are for estimation and illustrative purposes only. For official tax returns, please consult a qualified accountant or reference HMRC directly.

VAT Reverse Charge Calculator UK (2026/27): CIS Construction & B2B

B2B Reverse Charge VAT Calculator

✓ Verified for 2026/27

Transaction Details

Net Invoice Value

VAT Rate to Apply

Output VAT (Due)

£2,000

accounted in Box 1

Input VAT (Reclaimed)

£2,000

reclaimed in Box 4

Net Cash Effect

£0

zero cash flow impact

Total Purchase Value

£10,000

declared in Box 7

Reverse Charge Accounting Entry

Invoice Purchase Value £10,000

Output Tax (Box 1) +£2,000

Input Tax (Box 4) -£2,000

Net Cash Paid £0

Purchase 71%

Output VAT 14.5%

Input VAT 14.5%

ℹ️ Under the Reverse Charge, the UK buyer self-accounts for VAT on services or goods supplied by overseas businesses (or specific domestic trades, like construction under CIS). The buyer acts as both the supplier (Output VAT) and customer (Input VAT), resulting in a net-zero cash transaction.

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Verified for Accuracy (2026/27 Tax Year)

Fact-checked and audited by David Vance, CTA FCA, Chartered Tax Advisor & Accountant. Verified against official HMRC rules.

How We Calculated This

Input variables: Enter the relevant amounts, rates, or percentages in the form.
Real-time breakdown: The calculator applies HMRC rules and thresholds for the 2026/27 tax year to process the values.
Display outputs: The visual graphs, donut charts, and tables are compiled dynamically to show your net take-home and deductions.

Real-World Examples

Standard Scenario

A basic calculation applying standard UK tax bands and allowances.

Calculation runs based on standard HMRC rules.

With Pension or Deductions

Factoring in a percentage of salary sacrifice or pension contributions.

Deductions are calculated and adjusted accordingly.

Related Calculators

Frequently Asked Questions

What is reverse charge VAT and when does it apply?

The reverse charge is a mechanism where the buyer of goods or services, rather than the supplier, accounts for the VAT. It is most commonly used in the UK construction industry (Domestic Reverse Charge) and for cross-border B2B purchases of digital services. Instead of the supplier charging VAT and paying it to HMRC, the buyer declares both the input VAT (reclaimable) and output VAT (due) on their own VAT return.

How does the reverse charge affect business cash flow?

Because the buyer does not pay VAT to the supplier, the reverse charge has a positive impact on cash flow. Instead of paying VAT upfront and waiting to reclaim it on the next VAT return, the buyer simply accounts for the VAT as a net-zero transaction in their box 1 and box 4 VAT declarations, assuming they have full recovery rights.

What are the requirements for the UK Construction Domestic Reverse Charge?

To apply the domestic reverse charge in construction, both businesses must be registered for VAT in the UK, the services must fall under the Construction Industry Scheme (CIS), and the customer must not be an “end user” or intermediary landlord who does not make onward supplies of those construction services.