Since 1st September 2008, a Subcontractor no longer charges VAT to a Principal Contractor, where the charge on the invoice relates to a service subject to Relevant Contracts Tax in the Construction Industry. Instead the Principal Contractor is responsible for calculating the VAT on the amount charged by the Subcontractor and paying this directly to the Revenue through his/ her VAT Return.
To raise an invoice for a Principal Contractor:
Sales > Invoice Production > Invoice/ Credit Note Entry
“VAT ON THIS SUPPLY TO BE ACCOUNTED FOR BY THE PRINCIPAL SUBCONTRACTOR”.
(NB. The invoice must also include your VAT registered number)
NB. With agreement from both parties, the Principal Contractor can raise the invoice themselves on behalf of the Subcontractor. Should this be the case, the transaction will still need to be entered in Thesaurus Accounts, as above, or through the Sales > Batch Entry screen.
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