{"id":62819,"date":"2019-09-09T08:19:04","date_gmt":"2019-09-09T07:19:04","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=62819"},"modified":"2019-09-09T11:24:43","modified_gmt":"2019-09-09T10:24:43","slug":"domestic-reverse-charge-delay","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/domestic-reverse-charge-delay\/62819\/","title":{"rendered":"Construction sector domestic reverse charge delayed for 12 months"},"content":{"rendered":"

The introduction of the domestic reverse charge for construction services will be delayed for a period of 12 months until 1 October 2020, the Government has announced<\/h2>\n

Industry representatives raised concerns<\/a> that some businesses in the construction sector were not ready to implement the VAT<\/a> domestic reverse charge for building and construction on 1 October 2019.<\/p>\n

To help these businesses and give them more time to prepare, the introduction of the reverse charge has been delayed for a period of 12 months until 1 October 2020. This will also avoid the changes coinciding with Brexit.<\/p>\n

In a briefing note, HM Revenue & Customs<\/a>, said:\u00a0\u201cHMRC remains committed to the introduction of the reverse charge and has already increased compliance resource. It has put in place a robust compliance strategy for tackling fraud in the construction sector using tried and tested compliance tools.<\/p>\n

\u201cIn the intervening year, HMRC will focus additional resource on identifying and tackling existing perpetrators of the fraud. It will also work closely with the sector to raise awareness and provide additional guidance and support to make sure all businesses will be ready for the new implementation date.<\/p>\n

\u201cHRMC recognises that some businesses will have already changed their invoices to meet the needs of the reverse charge and cannot easily change them back in time. Where genuine errors have occurred, HMRC will take into account the fact that the implementation date has changed.<\/p>\n

\u201cSome businesses may have opted for monthly VAT returns ahead of the 1 October 2019 implementation date which they can reverse by using the appropriate stagger option on the HMRC website.\u201d<\/p>\n

Phil Hall, AAT<\/a> head of public affairs & public policy, said: “The VAT reverse charge makes the payment of VAT the responsibility of the customer rather than the supplier, which is an enormous change to the system.<\/p>\n

“Given the magnitude of the change, the short notice and the general lack of awareness as to what this means in practice, AAT backed the National Federation of Builders and Federation of Master Builders in calling for a delay to its implementation.<\/p>\n

“AAT is therefore very pleased that the Government has taken on board these concerns and agreed to a one-year delay.\u201d<\/p>\n

Alison Horner, indirect tax partner at MHA MacIntyre Hudson<\/a>, says while the 12-month delay to the introduction of the VAT domestic reverse charge for the construction sector is a welcome relief, it\u2019s very frustrating for the businesses which spent time and money to properly prepare.<\/p>\n

\u201cFor the whole industry, the delay will be a relief. Over the last 6-12 months, businesses have been spending time and money to ensure they are ready for the changes. There was a serious concern that many sub-contractors would go out of business as a result of the new rules.<\/p>\n

\u201cThe introduction of Making Tax Digital and the threat of Brexit at the end of October or soon after seem to have convinced HMRC it was too much to expect a key industry sector to implement such significant changes at this time.<\/p>\n

\u201cFor those who invested the time and money to be ready, it will be frustrating and it will have been costly, but they will be prepared when the charge is introduced next October. The worst affected will be those sub-contractors who moved to monthly returns to get ahead of the changes. These sub-contractors will need to reverse their VAT return accounting dates as soon as possible, which HMRC have said they will facilitate.<\/p>\n

“By remaining on monthly returns sub-contractors may find they have cash flow problems in funding an unexpected VAT payment to HMRC. They are the only ones who need to take immediate action. The rest can breathe a sigh of relief.\u201d<\/p>\n

\n<\/div>","protected":false},"excerpt":{"rendered":"

The introduction of the domestic reverse charge for construction services will be delayed for a period of 12 months until 1 October 2020, the Government has announced.<\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[304],"tags":[676,664,283,276,18288],"stakeholder_rel_tag":[],"contributor_rel_tag":[],"class_list":{"0":"post-62819","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-planning-construction-news","7":"tag-construction","8":"tag-construction-services","9":"tag-finance","10":"tag-government","11":"tag-hmrc"},"acf":[],"yoast_head":"\nConstruction sector domestic reverse charge delayed for 12 months<\/title>\n<meta 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