VAT Domestic Reverse Charge – 12 month deferral

HMRC has delayed implementing the domestic reverse charge for construction services for a further 12 months. The changes to legislation were designed to combat fraud within the construction sector and were intended to become live from 1 October 2019.

After taking representations from industry bodies, HMRC have given construction businesses more time, amid concerns that many are still not aware of the proposed rule changes and the potential clash with Brexit related issues to contend with over the upcoming months.

In conversations with our clients since the announcement on Friday 6th September 2019  it is clear that the deferral is welcome. However, as this is only a delay, we urge businesses to understand the cash flow implications of this rule change, together with considering how they may need to adapt accounting systems and communicate with relevant stakeholders in good time before 1 October 2020.

If you have any queries regarding this matter then please get in touch with Joe Sullivan