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The Government today announced its decision to delay by one year the implementation of potentially damaging VAT changes for construction companies.  Iain McIlwee CEO of FIS has said “we are delighted that common sense has prevailed and industry is being given the time and support it needs to adapt.  We can now focus our efforts on working with the supply chain to ensure that we are ready”

Reverse charge VAT was due to come into force from 1st October 2019 but the Government today announced its decision to delay implementation until 1st October 2020 after 15 trade bodies including FIS and other construction organisations led by the Federation of Master Builders (FMB) wrote to the Government to point out the damaging impact this badly-timed policy would have on the sector.

The situation hasn’t been helped by the poor communication and guidance produced by HMRC. According to research by the FMB published in July, more than two-thirds had not heard of the VAT changes and of those who had, around the same number hadn’t prepared. Brian Berry,  CEO of FMB said “it was now imperative the government and industry work together to deliver a sector-wide communications campaign, which “must include plain English guidance on the changes”.

Click here to read the Revenue and Customs Brief 10 (2019): domestic reverse charge VAT for construction services – delay in implementation