NEW GUIDANCE ON VISITING US
NEW GUIDANCE ON VISITING US

Construction Industry Reverse Charge

From 1 October 2019 HMRC will introduce a VAT domestic reverse charge (Reverse Charge) on specified construction services.

The move is designed to counter the perceived fraud in the construction industry, where it is believed suppliers are receiving VAT from customers and ‘disappearing’ before they account for the VAT to HMRC.

Under the Reverse Charge regime the customer (i.e. the recipient of the supply) will be responsible for identifying whether a supply is subject to the Reverse Charge and, if it is, for accounting to HMRC for the VAT that is due, rather than paying it to the supplier.

The Reverse Charge will generally only apply on services that are supplied to customers that also operate in the construction sector so it will not apply where the customer is a consumer or an ‘end user’ of construction services, or the customer is not registered for VAT.

“Many smaller contractors and sub-contractors operating in the sector currently rely on the VAT collected from customers as working capital before they pay it across to HMRC,” said Harwood Hutton director Keir Singleton.

“Businesses will need to ensure their payment processes are updated and accounts teams are trained to implement the changes required by the new legislation.

“We can help businesses navigate the complexities of the Construction Industry Scheme, in particular implementation of the forthcoming domestic reverse charge rules, and keep them compliant with the tax authorities.”

 

For further discussion and advice on the impact on your business please contact us.

 

Awards & Affiliations

Client Testimonials
  • I always get quick, clear and definitive responses from the Harwood Hutton tax team – commercial answers to commercial issues.

    Robin Berry – Morgan Management
  • Right from the outset Harwood Hutton gave us direction and great advice – and that advice has evolved over the years as we’ve grown. We’re both medium-sized companies providing a bespoke service – one furniture, one accountancy – and the relationship works.

    Andy McCarron, McCarron and Co
  • I’m deeply impressed with Harwood Hutton’s extensive knowledge of tax arrangements for residential and commercial property landlords.

    Qadeer Ahmed, MD, ABA Finance
  • They really took their time to understand what was important to us and our business and the expertise we required. Whoever we speak to at HH, we get the same fantastic response and technical input. It’s a real partnership.

    Edward Finch, group MD, MRIB insurance brokers
  • I have worked with the directors at Harwood Hutton on a number of mutual client matters over many years. The reassurance of their clear, commercial and focussed advice is one of the main reasons I regard this as one of my most valuable professional relationships.

    Frank Wessely, Partner, Quantuma LLP
  • Harwood Hutton never seem to rest on their laurels. They are always seeking out new avenues and ways to improve their offering. A very forward-thinking company with staff who are always well briefed and who approach each task with drive.

    Karl Austen, MD, Surefoot Communications
  • We have engaged Harwood Hutton in several areas of structuring, including VAT issues, decoupling an SPV from a group structure and HMRC clearance for a transaction. The team have exceeded all expectations by being proactive, measured and very thorough.

    Adam Fawsitt, Director, FHT Limited
  • We moved to Harwood Hutton as they delivered a succinct and professional proposal. If anything, we have been more impressed post-move. They are a fantastic company to work with. They do truly differentiate. They have the skills and capabilities of a mega firm but with a personal service.

    Edward Finch, group MD, MRIB insurance brokers
Sign up to our Newsletter

Sign up to our Newsletter

newletter image

Newsletter sign up

Join our mailing list to receive important news and insights for business leaders and private individuals