VAT Domestic reverse charge for construction delayed – Updated
Update Tuesday 9 June 2020
HMRC has announced in business brief 07/20 that the start date for the Domestic Reverse charge for construction services (DRC) has been further delayed to 1 March 2021 in light of the coronavirus pandemic.
This is the second time that the implementation date has been changed but for different reasons. In the brief HMRC advise that, whilst they remain committed to the introduction of the reverse charge and will continue to focus additional resource on identifying and tackling the fraud, the implementation has been delayed to help businesses overcome the effects of the coronavirus pandemic and give them more time to prepare.
This is a welcome announcement as businesses prepare to start work again but the implementation should not be overlooked – our full guide to domestic reverse charge (DRC) can be found here but if you have any questions about the DRC and how it may impact you please talk to your usual adviser.
Original article published 9 September 2019
HMRC have issued a business brief announcing a postponement to the implementation of the new domestic reverse charge which was due to take effect from 1 October. It has been delayed by a year and will now start 1 October 2020.
This means businesses have a further 12 months to prepare for the implementation.
HMRC’s announcement explains the reasoning behind the delay: “Industry representatives have raised concerns that some businesses in the construction sector are not ready to implement the VAT domestic reverse charge for building and construction on 1 October 2019.
“To help these businesses and give them more time to prepare, the introduction of the reverse charge has been delayed for a period of 12 months until 1 October 2020. This will also avoid the changes coinciding with Brexit.”
Our full guide to domestic reverse charge (DRC) can be found here.
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