• Skip to primary navigation
  • Skip to main content
  • Skip to footer

Top notice bar

Call us on 08000 388799

Avanti Tax Accountants HomepageAvanti Tax Accountants

Bookkeeping, Accountancy and Taxation services

  • Home
  • About Us
  • Our Services
    • Bookkeeping & Accountancy
    • Corporation & Personal Tax
    • Payroll & CIS
    • Company Secretarial Bureau
    • Budgeting, Forecasting & Business Valuations
    • Mentoring & Business Coaching
    • Software & Training
  • Our Accountants
  • News & Insights
  • Send An Enquiry
Home » News & Insights » VAT Changes For The Construction Industry Scheme

VAT Changes For The Construction Industry Scheme

Posted on 2nd October 2020

New VAT rules for building contractors and sub-contractors will come into effect from 1 March 2021. The new rules were originally expected to come into force from 1 October 2019 before an initial 12 month delay was announced. The start date was then delayed for a further 5 months until 1 March 2021 due to the impact of the coronavirus pandemic.

What is changing?

The new rules will make the supply of construction services between construction or building businesses subject to the domestic reverse charge. The reverse charge will only apply to supplies of specified construction services to other businesses in the construction sector.

From 1 March 2021, sub-contractors will no longer add VAT to their supplies to most building customers, instead, contractors will be obliged to pay the deemed output VAT on behalf of their registered sub-contractor suppliers. When this deemed output VAT is accounted for, the trader can then deduct the deemed VAT as input tax. Thus, overall, there is no additional cash cost for the contractor just admin hassle. Most accounting software can be adapted to account for the book entries required. This is known as the Domestic Reverse Charge.

New HMRC guidance

The guidance states that, for invoices issued for specified supplies that become liable to the reverse charge, the VAT treatment for invoices with a tax point:

  • before 1 March 2021 – the normal VAT rules will apply and you should charge VAT at the appropriate rate on your supplies
  • on or after 1 March 2021 – the domestic reverse charge will apply.

If you need help with VAT and the CIS scheme, call MJB Avanti (08000) 388 799

Source: Informanagement

Share this post:

Share on TwitterShare on FacebookShare on LinkedInShare on E-mail

Filed Under: News

Disclaimer:- The information contained herein is given by way of general guidance only and no action should be taken solely on the basis of the information contained herein. The Avanti Group (UK) Ltd will be pleased to provide further guidance on the issues, and how they might affect you. No liability is accepted by the firm for any action taken without seeking appropriate professional advice

Footer

Navigate

  • Find An Accountant
  • About Us
  • News & Insights
  • Privacy Policy
  • Letter Of Engagement

Our Services

  • Software & Training
  • Mentoring & Business Coaching
  • Budgeting, Forecasting & Business Valuations
  • Company Secretarial Bureau
  • Payroll & CIS
  • Corporation & Personal Tax
  • Bookkeeping & Accountancy

Get In Touch

Tel: 08000 388799
Send us an enquiry

  • Facebook
  • Instagram
  • Twitter
Copyright © 2023 Avanti Tax Accountants · All Rights Reserved
Part of The Maurice J Bushell & Co Ltd Franchise (UK) Ltd · Company Reg: 10407313 and The Avanti Group (UK) Ltd · Company Reg: 04635630 · Created by Purple Hippo
  • So we can contact you to discuss your enquiry
  • So a member of our team from your area can contact you
  • By clicking ‘Send Enquiry’ you agree to receive contact from Avanti Tax Accountants using the details given above. We respect your personal information and your privacy and will not share or sell your information to other organisations. Please read our Privacy Policy for more information.
  • This field is for validation purposes and should be left unchanged.