Following our recent articles regarding the construction services domestic reverse charge (“CSDRC”), the government has now decided to postpone the introduction of this mechanism until 1 October 2020.
HMRC issued a short brief on 6 September which can be found at: https://www.gov.uk/government/publications/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation#explanation-of-the-change
This brief outlines that the change in implementation date has come about due to industry representatives raising concerns that some businesses are simply not prepared enough for the introduction of the VAT domestic reverse charge by the original date of 31 October 2019. Other sources cite that the looming uncertainty over Brexit is also a factor in the delay.
HMRC insists that it still remains committed to the introduction of the domestic reverse charge and in the intervening year it will work closely with the industry to raise awareness and to provide additional guidance and support to ensure all businesses are prepared for the new implementation date.
If you have any concerns or wish to discuss the incoming domestic reverse charge for the construction industry with one of our advisers, please get in touch with our VAT Director Iain Masterton on 0131 558 5800.