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).
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 www.AffinityAssociates.com. You can also call us at +44-20-8903-2077 (London) for a free and friendly consultation to solve your doubts.