The domestic reverse charge comes into effect on 1 March –
here's what you need to do.
In the most significant change to the treatment of VAT in the
construction industry in a generation, the VAT domestic reverse
charge goes live on 1 March. The government has accordingly
rejected the latest attempt by the Federation of Master Builders
(FMB) and others to put a stop on this, and the additional
administrative and (for some) cash flow burdens that the reverse
charge will entail will need to be managed at a time when the
industry is already struggling with the challenges posed by the
pandemic and Brexit.
The change has been made in order to reduce "missing
trader" fraud, which is estimated to result in lost VAT
revenue of around £100m each year. This issue is by no means
unique to the construction industry, and the direct charge has
applied for some time to the sale of certain items in the UK
including microchips and mobile phones. Further afield, a majority
of EU
