VAT Reverse Charge effective from today
Further to our articles in June 2019 and September 2019 reporting on the new legislative changes regarding how VAT will be charged for construction services and the delay to that legislation, HMRC have confirmed that the VAT Reverse Charge will be effective from today Monday 1 March 2021 despite pressures and protests across the industry.
A further delay was requested by construction industry leaders on the basis that some businesses were already suffering from the consequences of the pandemic and the knock-on effect of the new legislation on cash flow could be the final straw for some of those businesses.
HMRC gave assurances in 2019 that they would work closely with the construction sector to provide guidance and support to ensure all businesses would be ready for the legislation. One of the reasons for the delay to March 2021 was the issue of Brexit; but of course, the pandemic has intervened to add a further complicating factor.
As before, it would be prudent for those registered for CIS and VAT to seek advice from their accountants urgently – if they have not already – as to how this will impact their cash flow and invoicing procedures.
This update is for general purposes and guidance only and does not constitute legal or professional advice. You should seek legal advice before relying on its content. For advice, get in touch with your usual Greenwoods GRM contact or scroll down to complete our enquiry form.