Guidance around the domestic reverse charge for supplies of construction and building services that takes effect from 1 March 2021

From 1 March 2021 the domestic VAT reverse charge will need to be used for nearly all supplies of building and construction services, applying to individuals or businesses registered for VAT in the UK and those reported within the Construction Industry Scheme.

The charge is designed as an anti-fraud measure and will require the recipient of supplies of relevant building and/or construction services to account for the VAT, rather than the supplier.

It is important that you are aware when you must use the reverse charge on your sales, purchases or both and that you find out how the charge works if you supply or buy services.

To ensure that you are prepared:

• Check that your software and accounting systems can deal with the reverse charge
• Look at the cash flow of your business to determine whether the change will impact it and if so, by how much
• Ensure that any staff managing your VAT accounting are aware of the change and the impact that it will have

You can find out more info, here.