HMRC has announced an update to VAT Reverse Charge. This update states that HMRC will now introduce VAT Reverse Charge on 1st March 2021:
5 June 2020
The introduction of the domestic reverse VAT charge for construction services has changed from 1 October 2020 to 1 March 2021.https://www.gov.uk/guidance/vat-domestic-reverse-charge-for-building-and-construction-services
VAT Reverse Charge is a major change to how VAT is collected in the building and construction industry. It will affect how you account for VAT if you buy or sell in construction services.
The new VAT reverse charge legislation has been implemented to prevent VAT fraud.
This change only applies if the customer and supplier are registered for VAT. Reverse charge applies to payments reported through CIS, whether the CIS payment is made gross or net of tax. If reverse charge does not apply, nothing changes, you should account for VAT the normal way.
To find out more about VAT Reverse Charge and how if will effect your business read our post here:
Please note: This article is intended to be an explanation of general principles and is not directed as advice for your particular situation. Please always check with qualified professionals regarding your business.