News & Important Dates

VAT Reverse charge - 1st March 2020

There have been delays in the implementation of the reverse charge procedure that was first due to be implemented in October 2019. This has now been delayed until 1 March 2021.

In essence a business customer in the construction industry receiving the supply of construction services effectively pays the VAT to HMRC directly rather than paying it to the supplier. This will have a significant impact on how VAT is both accounted for and on cash flows.

The domestic reverse charge will affect supplies made at standard and reduced rates where the payments are required to be reported through the construction industry scheme (CIS) and where the customer has not given written confirmation that they are an end user or an intermediary supplier as defined by HMRC.

Further guidance is available at:  https://www.gov.uk/guidance/vat-domestic-reverse-charge-for-building-and-construction-services

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