Reverse Charge for Construction Services

1st October 2019 will see the introduction of a new VAT accounting process which will affect the relationship between Contractors and Subcontractors within the Construction Industry Scheme.

To summarise, the ‘reverse charge’ as it is known, means that the customer receiving services will now have to pay the VAT due to HMRC instead of the supplier of the services. It only affects VAT registered businesses and those involved in the supply of building and construction services.

Contractors will need to review all existing agreements with Subcontractors to decide who this affects.

More information can be found here:-
https://www.gov.uk/guidance/vat-domestic-reverse-charge-for-building-and-construction-services

Whilst the guidance suggests that HMRC will be applying a ‘light touch’ for the first few months this will only apply where proactive businesses are seen to be “trying to comply with the new legislation in good faith”.

If you are one of those affected VAT registered businesses within the Construction Industry Scheme please get in touch. At Lewis & Co we have been providing support to businesses in Kent for nearly three decades. Please contact 01892 513515 or email info@lewisandco.biz

Feel free to read our Client Testimonials to find out how we’ve helped others https://www.lewisandco.biz/testimonials/