Engineer on construction sige

Delay of VAT domestic reverse charge rules for construction services

Launch date moved from 1 October 2019 to 1 October 2020

Robert Marchant, Partner, VAT
09/09/2019
Engineer on construction sige

HMRC issued its Revenue and Customs Brief on 6 September confirming implementation of the domestic reverse charge rules will be postponed by 12 months. This moves the implementation date from 1 October 2019 to 1 October 2020. 

Why the delay?

HMRC has stated their reasoning for the deferral is due to the implementation date coinciding with Brexit. In addition, the property and construction sector had expressed concerns as to whether affected businesses have had sufficient time to make necessary system changes.

What should you do now?

For many taxpayers, the year delay will give them additional time to consider how they are affected by the new rules and to make the changes needed to their accounting and invoicing systems.

However, HMRC is aware that some may have already implemented changes. For businesses who have amended their invoicing processes in anticipation of the original implementation date of 1 October 2019, HMRC has stated that where genuine errors arise as a result, they will take the deferral into account.

Contact us

If you would like to discuss how the VAT domestic reverse charge rules for construction services affect you and what you need to do to ensure you are compliant by 1 October 2020, please contact Robert Marchant or your usual Crowe contact.

Contact us

Robert Marchant
Robert Marchant
Partner, VAT
London