1 October 2019 should have seen the implementation of Domestic Reverse Charge (DRC) which will affect the VAT treatment of supplies in the construction sector. The new changes look to be the HRMC’s answer to tackling ‘missing trader’ fraud, where firms have been charging VAT to customers then disappearing before paying HRMC. It is calculated that missing trader fraud has resulted in a loss of around £100m in revenue for the country each year.
This change was announced in the 2017 Budget however industry representatives have expressed concerns that some construction sector businesses are still not ready for the changes. As a result and to give those businesses more time to prepare the changes have been put back until 1 October 2020.
HMRC has issued a brief which all VAT registered businesses in the construction sector should read, click here to read more.
With Brexit currently scheduled to happen on 31 October 2019 this delay will ensure that the proposed DRC changes won’t coincide with Brexit. However HMRC will expect all affected businesses to utilise the time generated by the delay and plan to be ready for 1 October 2020.
For more information please read our previous blog article on this subject or contact us on 0800 470 7820 or email email@example.com.