Important Update! VAT Domestic Reverse Charge for Construction Industry in the UK

Important Update! VAT Domestic Reverse Charge for Construction Industry in the UK

After getting delayed for almost two years (because of Brexit and COVID19 pandemic), the VAT Domestic Reverse Charge for the construction industry has finally brought into effect by the HMRC in the UK. The measure is introduced in order to control fraudulent sub-contractors who were charging extra/unnecessary VAT to their customers and not declaring in the returns. The HMRC has made some much-needed changes/modifications in the DRC for every entity associated with the building and construction industry. Mr Mukund Amin founding partner says, The DRC system has already been introduced in some other sectors including telecommunication services, mobile phones, utilities and computer chips to name a few, and has so far worked well. We at Affinity Group are sure that compliance will not be as difficult as it is perceived. Below are some facts that will help understand the concept.

Constriction/Building Business and VAT DRC?

If you are a VAT registered construction company or builder (contractor or sub-contractor), then these major VAT changes will definitely affect you. Overall, you will need to evaluate each contract that are in place to ascertain compliance. Our team of Accountants and Senior staff in the UK are given comprehensive training about when the reverse charge will apply and focus on to avoid any potential issues with HMRC. The charge will affect supplies, both at standard and reduced rates where payments are required to be reported via the Construction Industry Scheme (CIS).

VAT Domestic Reverse Charge for Construction Industry

 

If you are a VAT registered contractor/sub-contractor in the UK, and if you or your team of accountants is finding it hard to understand or cope up with the VAT DRC by the HMRC, then help is just a call away. Schedule a free consultation with an accounting expert in London (Call +44-20-8903-2077) who will answer all your question related to Domestic Reverse Charge and tips to stay protected from potential penalties.

What Your Construction Business Needs to Do?

If you are a VAT registered builder in the United Kingdom, then here’s what you need to do:

  • Check when you must use the reverse charge on your sales, purchases or both.
  • Find out how the charge works if you supply services.
  • Find out how the charge works if you buy services.
  • Read more detailed guidance about the reverse charge.
  • Watch our online webinars to get help and support for VAT

For Immediate Help and Support, Please Contact https://www.affinityassociates.com.

How to Prepare Your Construction Business for VAT DRC?

Advance preparation will certainly save from last-minute hassles. Here’s how you can prepare your business for VAT DRC:

  • Make sure your accounting systems and software can deal with the reverse charge
  • Consider whether the change will impact your cash flow
  • Make sure all your staff who are responsible for VAT accounting are familiar with the reverse charge and how it will work

If the VAT reverse charge does not apply you should follow the normal VAT rules. We also have flowcharts to help you decide if you need to use the reverse charge.

Get Your Doubts Cleared with Affinity Associates

If you need more information and help in understanding the revised VAT Domestic Reverse Charge for Construction Industry, how it will affect your business, and how you need to prepare yourself for the reverse charges, please feel free to contact Affinity Associates at AffinityAssociates.com. You can also call us at +44-20-8903-2077 (London) for a free and friendly consultation to solve your doubts.

Hire Expert Tax Accountants in London to End VAT Troubles for Your Small Business

Hire Expert Tax Accountants in London to End VAT Troubles for Your Small Business

Preparing, accounting, and filing VAT returns is an extremely daunting task, especially for busy business owners who have other important things to take care of, like overseeing day-to-day operations and managing customers among others. However, by engaging tax accountants for small business in London, UK, like the ones at Affinity Associates, business owners will never have to worry about their VAT matters ever!

Tax accountants for small business in London at Affinity Associates are thoroughly experienced to help you prepare accurate VAT returns, account them precisely in your books, and file them on your behalf to HMRC in a timely manner. In case any queries arise, these expert small business tax accountants will also deal with HMRC on your behalf.

What is VAT?

The value-added tax, or simply VAT, is a form of tax levied on certain goods and services sold by a VAT-registered business in the UK.

Businesses need to register for VAT only if their VAT taxable turnover is in excess of £85,000. The threshold of £85,000 is for the tax year 2018/19, but it may increase by £1000 or so every year.

Even if the turnover is less than the current threshold, small businesses can still voluntarily register for VAT in order to avail certain benefits. Boosting business profile and availing VAT refunds are among several benefits that a small business can achieve by voluntarily registering for VAT.

Once registered for VAT, it becomes compulsory for businesses to prepare and submit VAT returns online, often every three months! In order to pay the VAT bills, businesses must use electronic mediums, such as direct debit, Bacs, debit or corporate credit card. Failing to pay the VAT returns within the due date usually results in surcharges and penalties to the business owner.

There are three different VAT rates in the UK: Standard, Reduced, and Zero. The standard VAT rate is 20%, and it is imposed on most goods and services. The reduced VAT rate is 5%, and it is imposed on certain goods and services, such as children’s car seats, booster seats, and home energy. Finally, there is zero VAT rate, which is imposed on several VAT-taxable goods and services, like children’s clothes and most food products, but it is charged at 0% to the customers.

Expert Assistance for VAT Returns

Looking at above, you can easily see how confusing the VAT matter is. Which VAT rates you should apply to which products and services? How to prepare accurate VAT returns? How to submit VAT returns online to HMRC? How to make VAT payment? How to deal with HMRC in case of queries? How to avail VAT refund? These are just some of the questions that may bother even the savviest business owners. Even if business owners are able to handle VAT preparation and filing, it will prove too bothersome and time-consuming.

In order to free themselves from the troubles of VAT matters, it is sensible for business owners to seek the assistance of professionals. In this case, they are tax accountants.

VAT matters are usual chores for small business tax accountants. They know the ins and outs of VAT and will help you with every VAT matter, ranging from VAT preparation, VAT submission, VAT payment and everything in between. Engaging tax accountants for small business, like at Affinity Associates, will certainly benefit every business owner.

Affinity Associates is a top small business accountancy firm in London, UK. With some of the most competent accountants and tax accountants for small business, Affinity Associates provides a range of accountancy services to small business, including bookkeeping services, payroll services, VAT services, personal and corporate taxation services, and financial advisory services among other.

Browse through our site to learn more about our services https://www.affinityassociates.com/. If you have any questions about our small business accountancy services, feel free to contact us https://www.affinityassociates.com/contact-us/. We’ll be glad to assist you.