Chartered Accountants
HMRC announce delay to Domestic Reverse Charge VAT for Construction Services
Following on from our previous article regarding the Domestic Reverse Charge VAT (DRC) for Construction Services, HMRC have announced a delay to the implementation for 12 months. The DRC was due to come into force from 1 October 2019, but after meeting with a coalition of construction organisations, led by the Federation of Master Builders (FMB), it has been agreed that it would be postponed until 1 October 2020.
To explain the delay, HMRC have published Revenue and Customs Brief 10 (2019) with further information.
The delay will be welcomed by many as a recent survey by the FMB indicated that 69% of construction businesses had not heard about the new rules and of those who had, more than two-thirds (67%) had not fully prepared for the changes. Businesses who have already changed their invoices to meet the original implementations, and cannot easily change them back in time, will be supported by HMRC who will take into account the fact that the implementation date has changed.
Although businesses now have an additional year to prepare, HMRC has vowed to use this time to increase awareness and a robust compliance strategy.
If you would like to discuss how the Domestic Reverse Charge VAT delay will affect your VAT returns, please contact our VAT team.
Alternatively, if you would like to discuss any construction issues affecting your business, please email our EQ Property & Construction team at [email protected].
