From 1 March 2021, the way VAT is collected in the construction industry is changing and to help contractors understand the impact the changes will have on how businesses are operated HMRC is holding briefing session for firm who will be affected.
The charge applies to standard and reduced-rate VAT services for individuals or businesses who are registered for VAT in the UK and reported within the Construction Industry Scheme
Changes to VAT charging are being introduced in order to tackle the growing problem of VAT fraud in the construction industry. HMRC’s new domestic reverse charge for construction services were due to come into force in October 2019 but were then delayed and pushed back to March during the summer response to the pandemic. When it does come into operation next year its introduction seems likely to have a significant impact.
How to apply the VAT reverse charge for construction services: Find out when to apply the VAT reverse charge, how to show the reverse charge on your invoices, how your business may be affected, and what to do if you make a mistake when applying the reverse charge.