The upcoming changes to reverse VAT for building services are to be delayed, says HMRC. They were to kick in this 1st October, but have now been pushed back a full year to 1st October 2020.
The new guidelines, as announced not too long ago, mandate that UK businesses receiving a building- or construction-related service pay VAT directly to HMRC instead of to the supplier (with some exceptions). The supplier will then have to recover the VAT themselves.
Industry representatives cautioned that not all construction-related businesses will be fully ready for the reverse charge to come into play - hence this newly announced delay. Many businesses will breathe a sigh of relief at the extended due date giving more time to prepare for the reverse VAT charge to launch; time to inform their usual suppliers and clients of the upcoming change, get accounting software and systems set up accordingly, and plan for budgetary concerns being just a few of the matters that require careful consideration and, therefore, a reasonable amount of time to settle.
This delay was first announced on 6th September 2019. There’s nothing to suggest further delays, but anything is possible. Watch this space…
You can read more about the reverse VAT charge here. Alternatively, contact David Howard today for advice and guidance on VAT and any tax-related issues.