The Government has announced that there will be a delay to the VAT changes that were due to come into effect on 1 October.
The Domestic Reverse Charge (known as the Reverse Charge) will now start on 1 October 2020.
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.
In order to 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 October 2020 of not receiving VAT from customers
If you need any help or guidance on the Reverse Charge please contact us.