VAT Changes for the Construction Industry Deferred for a Year

Good news for anyone who would have been affected. VAT Changes for the Construction Industry Deferred for a Year.

Just last week the Jones Harris enews contained two different items about the new Reverse Charge VAT, due to be implemented on 1 October 2019.

VAT Changes for the Construction Industry Deferred for a Year

But with just a couple of weeks to go, the Government has announced its decision to delay the changes for a year.

Various construction organisations have worked together to lobby the Government, explaining that the policy would have a damaging impact on the sector at such a bad time. Indeed it could have led to a loss of productivity, reduced cash flow and pressure on jobs – a perfect storm to tip some companies over the edge.

The Federation of Master Builders (FMB) is one of the organisations which called for common sense. Brian Berry, Chief Executive of the FMB explains why the timing was particularly poor.

Why the timing of Reverse VAT was particularly poor

He says “The changes were due to be made just before the UK is expected to leave the EU, quite possibly on ‘no-deal’ terms. The situation hasn’t been helped by the poor communication and guidance produced by HMRC.

It’s really good news that VAT changes for the Construction Industry are deferred for a year. But improvements are needed when it is finally implemented.

“Despite the best efforts of construction trade associations to communicate the changes to their members, it’s concerning that so few employers have even heard of reverse charge VAT. Indeed, according to research by the FMB published in July, more than two-thirds had not heard of the VAT changes. Of those who had, around the same number hadn’t prepared.”

Plain English Explanations

Berry goes on to say “What’s required now is for the Government and industry to work together to deliver a sector-wide communications campaign. It must include plain English guidance on the changes.

“We also want to work with the Government to deliver workshops aimed at construction employers. They should be held in locations across the country, to explain what’s happening and why.”

Are you in the construction industry and would like support with getting ready for Reverse Charge VAT? Just contact us here at Jones Harris for a no-obligation chat.

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