Delay confirmed for “cash flow chaos” VAT change

The reverse charge VAT change was due to come into force in October but has now been pushed back to March 2021 following industry lobbying.

It is the second delay for the plan which was originally due to be introduced in October 2019.

Construction leaders wanted to see the scheme put back to October 2021 “at the earliest”.

But an update from HM Revenue & Customs has a revised implementation date of March 1 2021.

The “domestic reverse charge” change mean companies in the construction supply chain will no longer receive their 20% VAT payment when they submit bills.

The VAT cash will instead be paid direct to HMRC by the customer receiving the service who will reclaim it in the normal way.

updated: 05/06/2020