Construction industry to gain useful insight on landmark VAT Reverse Charge changes
Some of the region’s leading construction businesses are to get a useful update on upcoming changes to VAT from Loughton-based, Haslers Chartered Accountants.
Hosted at the firm’s offices in Old Station Road on 3 July, the free seminar will cover the new VAT rules for the construction sector which are due to come into force in October this year.
Under the new system, the reverse charge mechanism will place the responsibility on a contractor to account for the VAT on the services supplied by its sub-contractors.
The domestic reverse charge (DRC), as it is known, is not new but it is new to the construction sector and its impact is far-reaching.
It means that businesses in the construction supply chain will not be paid VAT on the services they supply so sub-contractors will no longer be paid VAT by their contractor customers.
Intended to reduce ‘missing trader’ fraud, by removing the opportunity for fraudsters to receive VAT and not pay it over to HMRC, the reverse charge will apply to businesses which resupply building services that they receive.
It is thought that its introduction could lead to considerable issues within the construction industry, particularly for those business which rely on the VAT paid to them to fund their expenditure until the payment is due to HMRC.
In addition there will be uncertainty over who should determine the VAT treatment of services supplied and whether the reverse charge applies, due to the complex chains of contractors and sub-contractors and the diverse types of supply.
Debra Dougal, VAT Partner at Haslers Chartered Accountants, said: “The construction industry is screaming out for clarity over this significant shift in tax rules and responsibility.
“The end goal of this campaign is to reduce VAT fraud, which should be commended, but the process for achieving this is complex and hasn’t been well communicated, which is why we are looking forward to helping contractors at our upcoming event.”
With such a high demand for expertise on this issue, Debra and her team anticipate a high turnout from local industry leaders.