What is it and when does it happen? A reverse charge on certain building and construction services comes into effect on 1 October 2019.
Who does this affect? The reverse charge affects businesses involved in buying and selling construction services, who will now need to consider the impact to their businesses and which supplies are affected.
Why is this happening? HMRC believe £100m of revenue is lost each year as a result of missing-trader fraud, where construction businesses charge VAT to their customers and then disappear before paying it over to HMRC. To combat this, new reverse charge rules will come into force on 1 October 2019, which will have a widespread impact on the construction sector.
What changes? For certain supplies of construction services, the customer, rather than the supplier, will be required to account for the VAT to HMRC. This reverse charge will apply through the supply chain until the customer in receipt of the supply is not a business but an end user. The reverse charge includes goods when goods are supplied with the specified services.
Where can I find out more?