The government has announced that the VAT Reverse Charge for UK based Construction businesses will be delayed until 1 October 2020.
Due to come in to force in October 2019, the decision to delay has been lobbied by industry representatives who raised concerns that some businesses in the construction sector are not ready for the implementation and need more time to prepare. This will also avoid any potential changes that could be brought in as a result of the UK leaving the European Union.
The delay has been met with positivity from the construction sector, who raised concerns that many businesses could fold due to negative cash flows.
HMRC says it ‘remains committed’ to introducing the reverse charge from October 2020 after putting a robust compliance strategy in place for tackling fraud in the construction industry.
Further guidance from HMRC will be released over the course of the next 12 months.
For further information about the VAT Reverse Charge delay, see the government website here.
If you need any further information about what you need to do to prepare in the interim period please contact your local account manager at SMH, or call 01142 664 432 or email info@smhca.co.uk.
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