VAT reverse charge for construction

After a number of delays HMRC's VAT domestic reverse charge for construction services is due to take effect on 1 March 2021. 

The measure, designed to counter fraud, represents a major change to the way that VAT is collected in the construction industry. It means that VAT-registered subcontractors performing qualifying "construction operations" will not charge the main contractor VAT for services rendered. Instead, the main contractor will pay the VAT over to HMRC on its behalf.

The change applies to standard and reduced-rated supplies of building and construction services made to VAT-registered businesses, who in turn also make onward supplies of those building and construction services.

You can find out more about the change in our guide: New VAT rules for construction



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