Domestic Reverse Charge for construction services delayed until 1 October 2020

HMRC has announced that the Domestic Reverse Charge for construction services, due to be implemented on 1 October 2019 will be delayed for 12 months for further consultation.

HMRC states that the reasonĀ  for this delay is that industry representatives have raised concerns that some businesses in the construction sector are not ready to implement the VAT domestic reverse charge for building and construction on 1 October 2019.

To give these businesses give them more time to prepare, the introduction of the reverse charge has been delayed for a period of 12 months until 1 October 2020. This will also avoid the changes coinciding with Brexit.

In the intervening year, HMRC says it will focus additional resource on identifying and tackling existing perpetrators of the fraud. It will also work closely with the sector to raise awareness and provide additional guidance and support to make sure all businesses will be ready for the new implementation date.

You can read more about the introduction of the DRC in our blog.