HMRC announced last week that another impact of the Covid 19 pandemic is that the already delayed implementation of the VAT Reverse Charge Scheme for the construction industry has again been moved back by five months to March 2021.
Whilst this isn’t much of a silver lining to the pandemic (more of a grey smudge really) it at least gives the industry more time to prepare for implementation. The new arrangements will have a significant impact on the industry – under the VAT Reverse Charge Scheme the customer receiving the service will have to declare the VAT to HMRC in its own VAT return instead of paying it to the supplier.
However, we would bet good money that the scheme will again be delayed, because much as we might wish otherwise, it’s a reasonable prediction to say both the economy and country at large is highly unlikely to be free of the impact of the pandemic by March.
