Domestic Reverse Charge Delay

Maria McConnell


Domestic Reverse Charge Delay

HMRC have made an 11th hour decision to delay the planned implementation of the new Domestic Reverse Charge until 1 October 2020.  This decision comes following concerned representations from a number of key industry bodies which were keen to make HMRC aware of the potentially damaging effect the new policy might have on businesses within the sector, particularly in light of other changes such as of Making Tax Digital and the ongoing uncertainty around Brexit.   Poor communication and late distribution of guidance by HMRC was also felt to be a contributing factor behind why many businesses were ill prepared to cope with the widespread changes the DRC would have introduced to VAT accounting practice for affected supplies.

A link to HMRC’s business brief can be accessed here - https://www.gov.uk/government/publications/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation

If your business has already made changes to its accounting system in preparation for the Domestic Reverse Charge’s original introduction date of 1 October 2019 and you would like to discuss how best to proceed in light of this change, please contact one of our VAT specialists who will be happy to assist you.

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