Are you ready for the new VAT Reverse Charge for Construction Industry?
The new domestic reverse charge being introduced From O1 October 2020., the aim is to prevent VAT fraud in the building and construction industry sectors. The changes will result in business making payment for construction services now responsible for self-accounting for VAT return.
Who will this affect?
The new changes will affect building contractors, all contractors registered for CIS, changes will be introduced to other sector later in the future. The reverse charge will only affect business registered for standard rated VAT in the UK but will not affect construction businesses that are not VAT registered.
Business will have to review their contract with their sub-contractors to check if the VAT reverse charge affect the services they offer. The management of the business will have to send mails to their sub-contractor regarding the new changes and sub-contractor will have to get confirmation from their contractor to confirm if reverse chares apply.
The way most of the construction business will be accounting for VAT and file return to HMRC will change, you will be needing support and tax advise on how to file VAT to avoid huge penalty from HMRC.
Do you have any concern or you are thinking of outsourcing your VAT services? Please contact us today via the contact page.