Reverse Charge VAT has been postponed!

Reverse charge VAT has been postponed for 12 months.

Reverse Charge VAT has been postponed!

The government has postponed the introduction of reverse charge VAT for the construction industry until October 2020.

Reverse charge VAT was brought in to combat fraudsters who are able to steal millions of pounds from the government in unpaid VAT.

Reverse charge VAT will require any UK customer to account for VAT on their own VAT return after receiving construction related services or materials, rather than the supplier of these services or materials accounting for the VAT.

Businesses in the construction industry who were due to be affected by this change raised concerns to HMRC that they wouldn’t be able to implement such a significant change, in time for October 1st 2019. The original implementation date also coincided with the threat of Brexit.

By putting the introduction of reverse VAT on hold for one year, businesses in the construction industry will be able to better prepare for the new way of doing things.

This extra time allows accounting systems to be fully developed to meet the requirements of the reverse charge, which will reduce the overall number of errors for HMRC which are naturally going to occur after the implementation of new rules like this one.

If your business needs help dealing with the new changes, we can help! Pegasus Opera 3 is equipped to deal with reverse charge VAT, and PM IT Systems can support you and your business with the transition. 

Call us today on 0151 678 1387 or email us

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«February 2020»

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