The Domestic Reverse Charge For Construction Services Is Delayed
Good news for those who are not yet ready ...
POSTED BY ALISON MEAD ON 16/09/2019 @ 8:00AM
HMRC has listened to industry concerns and delayed the Domestic Reverse Charge for Construction Services until October 2020 ...
The Domestic Reverse Charge for Construction Services is delayed until October 2020!
copyright: dedivan1923 / 123rf
It was designed to stop VAT fraud in the construction industry as building firms must start to account for the VAT due on supplies they've purchased rather than the supplier having to do it.
"It is designed to remove the scope for fraudsters
to steal the VAT due to HMRC!"
This follows on from similar measures introduced in response to 'criminal threats' for mobile phones, computer parts, emissions allowances, gas and electricity supplies, telecomms services and renewable energy certificates.
The Government first confirmed the Domestic Reverse Charge for Construction Services at the Autumn Budget 2017. After a short consultation, the final legislation and guidance were published in November 2019.
The long lead time was there to allow for mitigation of potential cashflow and administrative issues the change could have on businesses. There would need to be modifications to accounting systems for dealing with the new VAT calculations as suppliers would no longer get VAT payments from their customers.
However, after industry representatives raise concerns that many businesses are not ready for the implementation date of 1st October 2019, HMRC delated its introduction for 12 months, until 20202.
"Brexit is another reason for the delay!"
HMRC is committed to the introduction of the Domestic Reverse Charge for Construction Services so I can't see it being delayed any further. HMRC have also put in a robust compliance strategy for collections so there's no getting around it once it finally does arrive.
For businesses who have changed their invoices and accounting systems, HMRC will take any errors into account for the next 12 months. Those businesses can use the appropriate stagger option when filing their VAT return.
"Would you like to know more?"
If you'd like to find out more about the Domestic Reverse charge for Construction, how you need to modify your accounting systems, or even if it applies to you, then do give me a call on 01604 420057 or click here to ping me an email and let's see how I can help you.
Until next time ...
If anything I've written here resonates with you, why not visit www.siliconbullet.com to discover how we can help you with accounts and IT support?
More about Alison Mead ...
Alison loves bookkeeping. She has been helping clients to be better bookkeepers in Sage 50 for over 22 years and has more recently added Xero Accreditation to her list of skills.
She specialises in a very unique hand-holding method of training, helping bookkeepers and business owners to use their accounts software as and when they need support in setting up and producing their invoices, reports and financial information.
Alison combines her role at Silicon Bullet with running two network marketing businesses and is also a Regional Leader for 4Networking as she likes to keep busy.
You know what they say, if you want something done well ask a busy person!
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