An important update for those in the construction industry, as HMRC has announced that major changes to VAT administration are to be put on hold until next year. Originally due to come into force from October 2019, the domestic reverse charge will now be implemented from 1st October 2020.

The Government has stated that the delayed introduction is to give businesses in the construction sector more time to prepare, after concerns were raised that many were simply not ready for the upcoming changes. The delay will also mean that new rules won’t coincide with Brexit. However, we suspect that it was in part also influenced by HMRC’s implementation of Making Tax Digital. Whatever the reason, the new schedule will undoubtedly be welcomed by all involved, giving business owners a much-needed break.

Introduced by the Government as an anti-fraud measure, the legislation means that a VAT-registered customer receiving supplies of construction services must account for the VAT due on these supplies, rather than the supplier. You can find more information on the changes, and other construction issues, here on our blog.