From 1 October 2019, HM Revenue and Customs will introduce a VAT reverse charge on certain building and construction services. This measure will mean that the customers will be liable to account for the VAT in respect of those purchases, rather than the supplier.
The reverse charge will apply when a supply is made between VAT-registered businesses only. From 1 October you will be required to change the way they invoice in order to account for the reverse charge. It is important to note that any goods supplied in conjunction with any service supplied will also fall within the scope of the Reverse Charge.
We anticipate that the reverse charge will impact small and micro-businesses with a loss of cash flow where VAT will no longer be charged. Also, any businesses who are under the Flat Rate Scheme (FRS) will likely be affected by an increase in VAT costs.
For more details CLICK HERE to view our downloadable factsheet.
If you feel this will impact upon your business and would like to discuss further, please contact our Plymouth Tax Team on 01752 666601.