The Government has confirmed that the VAT changes that were due to come into effect in October 2020 will now be going ahead next year.
The Domestic Reverse Charge (known as the Reverse Charge) will now start on 1 March 2021..
The new Reverse Charge, that applies to building and construction services will affect the way that VAT is collected. It will mean that the customer receiving the services will have to pay the VAT due direct to HMRC.
If you haven’t done so already it’s important that you prepare for the changes:
- Check whether the charge will affect your sales, purchases, or both
- Ensure your accounting systems are up to date and ready to deal with the new system
- Consider the potential impact on cashflow from March 2021 of not receiving VAT from customers
If you need any help or guidance on the Reverse Charge please contact us.
For further information please see GOV.UK