Posted 29/01/2021 In Advice, Blog, News, Property & Construction 2021-01-292021-01-29https://www.wrightvigar.co.uk/wp-content/uploads/2017/01/wright-vigar-logo.pngWright Vigarhttps://www.wrightvigar.co.uk/wp-content/uploads/2017/01/wright-vigar-logo.png200px200px 0 0 After several delays to the VAT domestic reverse charge for construction services, it is finally due to come into force on 1 March 2021. This anti-fraud measure represents a major change to the way VAT is collected in the construction industry. VAT-registered subcontractors performing qualifying “construction operations” will not charge the main contractor VAT for services rendered. Instead, the main contractor will pay the VAT over to HMRC on its behalf. This change applies to both standard and reduced-rated supplies of building and construction services made to VAT-registered businesses, who in turn also make onward supplies of those building and construction services. Landlords, property developers and tenants, are therefore exempt. The definition of “supplies” is closely aligned to the construction industry scheme, but it is important to note is does not include supplies of staff or workers. For any business liable for the change we would recommend you have the following in place: Procedures to ensure that there is an agreement between suppliers and customers over their status and the correct VAT accounting treatment Updated accounting systems to ensure that the correct invoicing procedures are adopted according to the rules in operation at the time of supply Ways to manage the effect of the new rules on the business’s cashflow. Find out more Recent PostsSuper Deduction for Capital Allowances ExplainedWright Vigar Announce New Associate DirectorWhat COVID-19 support schemes are continuing?