HMRC has postponed the introduction of the VAT domestic reverse charge for construction services for 12 months to 1st October 2020.
AAT Tax Policy Expert Brian Palmer, explains, “Seemingly, and in spite of whatever views people have on the government’s approach to Brexit, in this area at least this appears to be a government that listens.”
In the brief, HMRC states: ‘Government has listened to the concerns raised by industry representatives, and recognises that some businesses in the construction sector require more time to implement the VAT domestic reverse charge for building and construction on 1st October, and that this is close to the date the UK is due to exit the EU.
‘The government remains committed to the introduction of the reverse charge. HMRC has already increased compliance resource and put in place a robust compliance strategy for tackling fraud in the construction sector using tried and tested compliance tools. In the intervening year, HMRC will use the time to focus additional resource on identifying and tackling existing perpetrators of the fraud.
‘To help businesses get ready in the next 12 months, HMRC will continue to work closely with the construction sector to raise awareness and provide additional guidance and support to ensure all business will be ready for the new implementation date.’