In the current times of economic uncertainty, the construction industry has welcomed the delay to the domestic reverse charge VAT for construction services scheme, due for implementation on 1st October 2020.
The scheme first announced in November 2018, has already seen delays with the original date of implementation earmarked for 1st October 2019. However, due to concerns over Brexit, the updated VAT requirements which lay the responsibility at the door of VAT registered customers to account for VAT on supplies, reporting this information in their own returns causes, plenty of headaches for both sides.
HMRC cites that the new measures will reduce fraud within the construction industry, however for those working in and alongside affected businesses, it seems an additional, complex process creating fundamental changes to ways of working and potential hardship in an already difficult market.
The announcement to delay the scheme until October 2021 provides much needed breathing space for small business owners to focus on securing their futures during the current Coronavirus crisis, without having the additional concern of new VAT invoices and complicated reverse charge systems to think about.