Earlier this month HMRC announced a delay to the new VAT regime for the Construction Industry.
The major change to VAT legislation within the sector was due to come into force on 1st October 2019, affecting the way invoicing and payment of VAT is charged and paid over to HMRC.
Pressure from lobbying groups within the industry along with the overriding uncertainty of Brexit has lead to the delay of the controversial Domestic Reverse Charge VAT Scheme for the Construction Services, now set for implementation 12 months later on 1st October 2020.
This provides an opportunity for VAT registered contractors and sub-contractors to better prepare for the changes which will require new ways of issuing invoices and tracking VAT along with planning for the potential gap in cashflow the changes may cause.
Businesses will also have time to consider their current VAT scheme accounting processes as the flat rate VAT scheme will no longer be an acceptable method to account for VAT under the new reverse charge legislation.
For more information on how to prepare your business for the changes Contact us.