HMRC U-turn as VAT reverse charge in construction is delayed by 12 months
09 September 2019
09 September 2019
Aspire comment
This may have been a welcome surprise to many, whilst frustrating to others who have been busy spending time and money on preparations for 1st October 2019. For those of you who have undertaken preparation, this will not have gone to waste as HMRC state they remain committed to introducing this change – you may just need to revisit it and refresh your memory closer to 1st October 2020. It will also provide ample time for software providers to ensure their updates are compliant and for sufficient tests to be run.
The construction industry is in agreement that HMRC had not done enough to prepare those who will be affected by the reverse charge. We were told by Nick Chambers of HMRC’s VAT Serious Non-Compliance and Fraud Team, in April 2019 that it was intended for there to be a dedicated webpage but due to Brexit and Making Tax Digital, this had not been done. Perhaps HMRC will now provide the necessary resource and provide more assistance in the next 12 months, as the policy paper states.
The policy paper refers to the delay avoiding the changes coinciding with Brexit – does this mean that other legislative change will be put on hold? For example, the off-payroll extension to the private sector expected to take effect from April 2020?