Government announced today that the introduction of the domestic reverse charge VAT for construction services will be delayed until 1 October 2020. A brief issued by HMRC explains that the introduction of the domestic reverse charge for construction services is to be delayed for a period of 12 months:
“Industry representatives have raised concerns that some businesses in the construction sector are not ready to implement the VAT domestic reverse charge for building and construction on 1 October 2019. To help these businesses and give them more time to prepare, the introduction of the reverse charge has been delayed for a period of 12 months until 1 October 2020. This will also avoid the changes coinciding with Brexit.”
Last month LEIA, together with other major trade associations in the construction industry, made a plea to the chancellor to delay the implementation of reverse charge VAT changes due to take place on 1 October. In a letter delivered to the chancellor, Sajid Javid and published in the Times [8 August], the industry raised serious concerns regarding the imminent changes and stressed the significant negative economic impact this will have on the construction industry.