Update: Domestic reverse charge VAT for construction services
Implementation delayed following concerns raised by industry representatives.
HMRC has announced that the planned implementation of the VAT domestic reverse change for building and construction services, due on 1st October 2019, has been delayed for 12 months until 1st October 2020. Construction industry representatives had raised concerns that some businesses in the sector are not ready for the change, therefore more time has been given to prepare.
The reverse charge means that the UK customer receiving supplies of construction services accounts for the VAT on them rather than the UK supplier. Its introduction is designed to combat fraud where VAT due is stolen, and follows similar implementations relating to the supply of other goods and services such as computer chips, mobile telephones and telecommunication services.
In the intervening year until implementation of the reverse charge, HMRC has put in place a robust compliance strategy for tackling fraud. Any business which have opted to submit monthly VAT returns as they would receive regular VAT repayments can change back by using the VAT stagger option on the HMRC website.
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