H M Revenue & Customs have released a brief confirming the VAT reverse charge for the construction industry will be delayed until 1 October 2020. More than 150,000 construction companies were facing a 20% drop in cash flow when planned VAT changes came into force next month. H M Revenue & Customs remains committed to the introduction of the reverse charge however they are aware businesses need more time to prepare for the change.
More information can be found on the proposed change here.
H M Revenue & Customs has confirmed industry representatives have raised concerns that some businesses in the construction sector are not ready to implement the VAT domestic reverse charge for building and construction on 1 October 2019. To help these businesses and give them more time to prepare, the introduction of the reverse charge has been delayed for a period of 12 months until 1 October 2020. This will also avoid the changes coinciding with Brexit.
If your businesses is VAT registered and in the construction industry then these changes are likely to have a considerable impact on you. If you require any assistance with your VAT then please contact us today.