From 1 October 2019, a new domestic reverse charge system for VAT will come into effect. This blog will explain how the new system will work and who it will apply to.
The Current System
Under the current rules, a supplier of construction services is liable for the VAT on the supply of goods and services.
In practice, this means that the supplier charges VAT when they bill their customer. Their customer then pays their bill and the VAT to the supplier, who then forwards the VAT payment to HM Revenue & Customs ("HMRC").
However, there have been increased instances of criminal activity in relation to this, whereby the supplier has gone missing, along with the charged VAT before it is paid to HMRC. Therefore, new preventative ru...
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