VAT registered construction businesses. The way you file VAT is changing.
In March 2021, the VAT domestic reverse charge for building and construction services, to give it its full title, was introduced. This fundamentally changed the way in which VAT is to be applied to the supply of building and construction services in the UK. Both suppliers and purchasers of construction services will see significant change as a result of the implementation of the VAT reverse charge.
With the first month-end fast approaching, it is essential that businesses throughout Northern Ireland and the UK understand the new rules and prepare for what the change means for their business, both from a cash flow perspective and from an internal process perspective. To assist you in this process we are pleased to release FPM’s Guide to the Domestic Reverse Charge which outlines the key changes, implications and necessary actions, to ensure that your business remains VAT compliant.
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In this guide we cover important areas, such as:
What is VAT Domestic Reverse Charge?
Domestic reverse charge VAT legislation is a change in the way CIS registered construction businesses handle and pay VAT. It was introduced in the UK on 1 March 2021, having previously been delayed from October 2019. Find out more >
Why is it being Introduced?
The VAT domestic reverse charge procedure is an anti-fraud measure designed to counter sophisticated criminal attacks on the UK VAT system. It intends to cut down on “missing trader” fraud, where companies receive high net amounts of VAT from their customers but have no intention of paying the VAT to HMRC. Find out more >
Who will it Affect?
It affects VAT registered construction businesses who supply or receive construction and building services that are reported under the Construction Industry Scheme (CIS). Find out more >
Five key questions to ask yourself to make sure you have considered all areas and your preparations are robust and compliant. Find out more >
Impact on your Business
It is essential that businesses throughout Northern Ireland and the UK understand the new rules and prepare for what the change means for their business.
- The way in which you invoice your customers;
- The way in which you report transactions on your VAT returns; and ultimately
- The impact this will have on the cash flow of your business?
Reviewing contracts to determine where the reverse charge will apply, ensuring accounting systems have been updated to deal with the changes and considering the impact on cash flow are some of the areas which the VAT reverse charge might have an impact on. Find out more >
Guidance is one thing, but action is essential to ensure your business is ready for the changes imposed by the VAT reverse charge. With the 1st month-end fast approaching, we encourage you to prepare with the key actions outlined. Find out more >