On Friday 5th June, HMRC announced a further five-month delay to the introduction of Domestic Reverse Charge for VAT due to the impact of COVID-19 on the Construction services. The change will now commence on 1st March 2021. Click here to view the brief.
Domestic Reverse Charge for Construction services was originally scheduled to come into effect on the 1st October 2019. This was then delayed by 12 months due to the concerns regarding the lack of preparation and the devastating impact it may cause businesses. The start date has now been postponed a further 5 months due to the impact of the Coronavirus.
The new rule sees a change to the way VAT is payable on construction and building invoices. The customer receiving the service will have to pay the VAT owed directly to HMRC rather than paying the supplier if they report under the Construction Industry Scheme (CIS).
Click here to view the guidance issued by HMRC on the Domestic Reverse Charge.
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