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Construction industry VAT changes

18/06/2019 by Webmaster

There are changes to VAT on construction services from 1 October 2019.  The VAT domestic reverse charge for building and construction services is being introduced - so take care!.

Where the customer is in the construction industry supply chain and is registered for VAT, the supplier does NOT charge them VAT.  Instead the customer has to pay the VAT to HMRC direct.  This "domestic reverse charge" is a major change to the way VAT is collected in the building and construction industry and is designed to reduce the £100m loss of revenue that HMRC think they suffer each year.  So if you are a supplier, your cash flow may take a hit.  And if you are in the middle between supplier and another customer, you have to make changes to include the reverse charge on your returns.

We don't claim to understand all the intricacies of the tax, but please contact us and we can put you in touch with VAT experts.  And HMRC's guidance notes can be found here: https://www.gov.uk/guidance/vat-domestic-reverse-charge-for-building-and-construction-services

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