BESA argued that the planned October introduction the VAT changes, already expected to increase burden and restrict cash-flow for many businesses, would pose a bigger shock to the industry because the timing would coincide with the UK leaving the EU and a possible ‘no deal’ Brexit.
HMRC plans to introduce VAT Reverse Charging on the majority of construction related services from 01 October 2019. Companies who are VAT registered and Construction Industry Scheme registered will no longer pay VAT to the majority of their subcontractors.
VAT will only be paid to firms who supply only labour (employment businesses) and to the merchants and businesses that sell building materials only without any fix.
BESA reiterated that businesses must understand and be prepared for these changes to prevent being caught out during the transition regardless of when it occurs.
The head of legal and commercial services at BESA, Debbie Petford, said: “We know keeping on top of changes can be challenging for many businesses which is why BESA members benefit from easy access to practical resources and advice from our legal team.
“BESA members receive regular guidance through monthly tax bulletins, as well as template letters and invoices we have prepared to ensure their supply chains are proactively informed well before October.
“BESA recently produced a great webinar explaining the impending changes to VAT charging that can be accessed in the members’ area of our website. The webinar was well attended will be repeated in September to ensure all our members have the information to manage this challenging issue.
“Most importantly, the BESA legal team are always on hand to help our members with any queries.”