If the Brexit deal, ongoing Covid-19 developments and updates on the Building Safety Bill and the Corporate Insolvency and Governance Act isn’t enough to keep those in the construction industry on their toes, the latest guidance from HMRC is that the VAT reverse charge on construction services will commence from 1 March 2021.
In our previous blog on the VAT reverse charge in September 2019, we discussed what the VAT reverse charge is, why it is being introduced and the major effects it will have on how VAT is handled in the construction industry. The key message is that the reverse charge will require a recipient (the employer), rather than the supplier, of specified building and construction services to account for VAT. The new rule will apply unless the recipient is an “end user” or an “intermediary supplier” or is not required to report payment under the Construction Industry Scheme, in which case the normal VAT rules apply. Continue reading