I administer the paperwork for 2 companies – company A is a Ltd construction company, vat & CIS registered - although normally it only does new build work so the vat reverse charge does not effect it, hence my lack of understanding.

Company B is vat registered only.

So my understanding is if company A provides one of it’s subcontractors to work on company B’s property then the following should happen?.

Subcontractor issues invoice with reverse charge written on it to company A. I post it in Sage with a T0 (0%) tax code. I then raise a vat invoice from company A to Company B , I post the sales invoice in Sage with a tax code T1 (20%) in company A . And in company B I post the purchase invoice with a T1 (20%)tax code.

Thanks