Construction Industry Scheme Legislation Changes for VAT
September 2, 2019 | News
In 2017, the UK Government announced new legislation to combat VAT fraud seen in the Construction Industry. The goal is to cut down on ‘missing trader’ fraud where the companies receive high net amounts of VAT from their customers and then go missing.
The VAT Reverse Charge legislation will come into effect in October 2019 and is estimated to impact up to 150,000 businesses in the construction and building sector. The legislation is concerned with moving the VAT liability from the supplier of a service in the construction industry to the end recipient.
This will impact domestic supplies (UK Only) where payments are reported under the 'Construction Industry Scheme', more specifically supplies of services that are Standard Rate (20%) or Reduced Rate (5%).
The Sage 200 Summer 2019 Enhancements release which will be available early September, will enable you in conjunction with third-party software to meet your compliance requirements.
If you are affected by these changes and want to find out more, give the Pinnacle Direct team a call on 0843 453 0103 or firstname.lastname@example.org
*Since this article was originally published, HMRC have announced that the changes have been delayed and will now take effect from October 2020. For more information visit the HMRC website.