HMRC has announced a further delay to the introduction of changes to VAT accounting within the construction industry, in part due to the COVID-19 crisis.
What are the proposed changes?
Substantial changes are planned to the way VAT is accounted for in the building and construction industry. In certain circumstances, the supplier of services will no longer charge VAT.
Instead, the customer will self-account for VAT, via a VAT accounting mechanism that is referred to as Reverse Charge.
Previous update: Changes to accounting for VAT in the construction industry
When were the changes originally due to be implemented?
The changes were due to be implemented on 1 October 2019. This was then delayed by 12 months to 1 October 2020, as a result of feedback from the industry that businesses were not yet prepared for the changes.
When will the reverse charge changes now be implemented?
As a result of COVID-19 and giving businesses further time to prepare, the implementation has been delayed by a further five months to 1 March 2021.
Where can I access further advice?
Since the changes were first announced, we have been advising construction businesses regarding the impact on their VAT accounting, as well as the new procedures that need to be in place in order to be VAT compliant.
If you need support with navigating the changes, please speak to Jas Dhillon, VAT Director at Lubbock Fine (firstname.lastname@example.org) or complete our contact us form.