Search Traffic for the VAT Reverse Charge in Construction Rises 40 Per Cent

Search Traffic for the VAT Reverse Charge in Construction Rises 40 Per Cent

New digital construction industry report reveals a rise in searches for the VAT domestic reverse charge.

Online searches related to the VAT reverse charge in building and construction services have risen by nearly 40% over the last quarter, reveals data from a new report by Koozai, a leading digital marketing agency for the construction and home improvements trade.

Part of a new ‘Construction Industry Search Report: 2021/22, the research reveals that over 64,000 searches were made for keywords associated with the VAT domestic reverse charge in the construction industry over the last three months. Compared to the previous quarter, this represents a 39.94% quarter-on-quarter increased in searches.

Introduced this spring, The VAT domestic reverse charge for building and construction services was a change made by the government in how VAT for certain kinds of construction services (and related building materials) is handled.

It means that businesses providing construction services to a VAT-registered client do not have to account for the VAT, with the client paying for the VAT instead. This means that for services they provide, sub-contractors now require the contractor employing them to account for the VAT directly to HMRC.

Given that there are a number of specific circumstances in which the VAT domestic reverse charge may or may not apply, the increase in searches and intent behind the keywords used suggests that many in the building and construction industry are searching for more information about the policy. This could be because they are confused about whether it applies to them, or because they want more information on how it applies in practice. 

The changes to VAT for some construction businesses was introduced to help tackle what HMRC have described as fraud in the construction industry. However, the policy will have an impact on cashflow for some contractors, many of whom have already been under financial pressure due to Brexit, the pandemic and other economic factors. 

Cashflow has been a challenge for several businesses in construction, with one survey suggesting that it remains a persistent problem for at least one in five businesses in the industry¹.

For more information about the ‘Construction Industry Search Report: 2021/22’ visit:

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