Construction firms warned of March 01 VAT changes

Construction firms warned of March 01 VAT changes
Save this page for reference and share it with your colleagues

Published: September 8th, 2019

bigstock-Industrial-Bricklayer-Worker-P-141056753Trades within the construction industry will have to start using a new method of accounting for VAT from the start of March 2021.

New rules are being introduced by HMRC in a bid to tackle VAT fraud and prevent losses to the taxman of up to £100million a year.

The new rules mean that from March 2021 VAT paid between construction companies will be reverse charged, changing the way VAT is handled.

As a result, the contractor will have to pay the VAT which is due instead of the subcontractor or supplier.

The HMRC says it will work alongside the construction sector in the first six months of the new regime to help businesses comply and overcome any cashflow issues caused by the changes.

A spokesman said: "HMRC will be operating a light touch period during the first six months where we will assist businesses that are trying to comply, but have struggled for genuine reasons."

The HMRC Business Payment Support Service are aware that some businesses may require assistance with paying their taxes as a result of the loss in cash flow. Any assistance will depend on the specific circumstances of individual cases, but might include granting businesses more time to pay the tax they owe or arranging an instalment plan.

Guidance on the new rules and help for construction firms worried about the impact on their cashflow can be found here: https://www.gov.uk/guidance/vat-domestic-reverse-charge-for-building-and-construction-services

And businesses which encounter payment issues can find help and advice here: https://www.gov.uk/government/organisations/hm-revenue-customs/contact/business-payment-support-service

Traders who have further concerns or questions can contact HMRC via: [email protected]

Contact us about Construction firms warned of March 01 VAT changes

  • You won't receive lots of emails, and you can unsubscribe at any time.
  • By submitting my details, I consent for Marches Growth Hub to process my data for the purposes described in the Privacy Policy.

phone

Herefordshire

01432 383343

Shropshire

01743 250526

Telford & Wrekin

01952 567589

or email us direct

[email protected]