VAT Reverse Charge Implementation Delayed

Polly Tregaskes

by Polly Tregaskes, Tax Manager

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The implementation of the domestic reverse charge for construction services, which has caused much consternation for the construction industry, has been delayed until 1 October 2020.

The reverse charge was due to be implemented on 1 October 2019, but this has now been put back by a year following industry concern that some businesses in the construction sector were not ready to implement the charge.

HMRC have stated that they remain committed to the introduction of the reverse charge and have already increased compliance resource. It has put in place a robust compliance strategy for tackling fraud in the construction sector using tried and tested compliance tools.

In the intervening year, HMRC is planning to work closely with the construction sector to raise awareness and provide additional guidance and support to make sure all businesses will be ready for the new implementation date.

HRMC is advising that as some businesses will have already changed their invoices to meet the needs of the reverse charge and cannot easily change them back in time, where genuine errors have occurred, HMRC will take into account the fact that the implementation date has changed.

Some businesses may have opted for monthly VAT returns ahead of the 1 October 2019 implementation date which they can reverse by using the appropriate stagger option on the HMRC website.

A full explanation of the delay can be found on HMRC’s website.


This publication has been prepared by RRL LLP. It is to be treated as a general guide only and is not intended to be a comprehensive statement of the law or represent specific tax advice. No liability is accepted for the opinions it contains, or for any errors or omissions. All rights reserved.