The new date for this coming into effect will be on 1st October 2020. This change is where VAT-registered subcontractors will no longer charge VAT on certain construction services to another VAT-registered business. Instead, the customer will ‘self-account’ for any VAT due – this is known as the Reverse Charge.
The sudden U-turn is unprecedented and comes as a result of the construction industry raising concerns about the lack of awareness and lack of time to implement the relevant changes needed.
HMRC recognises that some businesses will have already made changes to meet the needs of the reverse charge and cannot easily change them. Where genuine errors have occurred, HMRC will take into account the fact that the implementation date has changed.
If you have made changes to your set up or arrangements, please get in touch today and we can help you undo them and assist you with any further adjustments that maybe needed. We can also look after your bookkeeping and VAT affairs. Please contact us on 0800 0523 555 or use our simple online contact form to arrange a free initial consultation.
By Samantha Skyring FCCA
Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.