Domestic Reverse Charge for Construction Services to be delayed – 1 October 2020
HMRC issued a Brief on Friday 6th Sept to announce that the Domestic Reverse Charge (DRC) that was due in from the 1st October 2019 will be delayed till 1st October 2020. It would be fair to say that there has been a lot of concern about the sector being ready for the 1st October date. Main contractors have started to check the End User status of their clients but for a large proportion of the sub-contractors that we have been speaking to the impact of the planned change and the work involved to amend accounting systems was proving a real issue.
HMRC remain concerned about Fraud in the sector and will be continuing their active engagement through the Supply Chain Fraud Teams across the UK in the run up to the 1st October 2020. In the meantime, we will continue with our “Inform and Plan” sessions, which our construction clients have found helpful in getting ready for the change. They are on-site sessions with construction businesses to explain how the change will affect their VAT accounting, invoicing and cashflow positions. If you feel your business would benefit from this then do email@example.com
The delay itself may also cause concerns for those you have already amended your invoicing templates or – more importantly – have already requested a switch to Monthly VAT Returns to assist in the planned negative cashflow impact the DRC would have created from October. Should you have any questions then do get in touch with your Centurion VAT Specialist. We are here for when VAT gets complicated!