Tuesday, 9 June 2020

Construction VAT reverse charge delayed again to March 2021

Due to the impact of the Coronavirus on the construction sector, the UK VAT domestic reverse charge has been delayed until March 2021. 

The VAT reverse charge was due to be introduced in October 2020, and would have seen an end to subcontractors in the construction sector receiving VAT payments in most situations. 

It is the second time we have seen a delay with this scheme, the original date for the changes to be introduced was scheduled for October 2019.

Under the proposed VAT reverse charge system, only the main contractor will collect VAT from the customer to pass on to HMRC, rather than each party in the supply chain paying VAT to HMRC and claiming back their share.

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