From 1st Oct’ 2019 the government is introducing a domestic ‘Reverse Charge’ (RC). The charge will affect supplies of ‘specified services’ at the standard or reduced rates of VAT where payments are required to be reported through the Construction Industry Scheme (CIS).
This means that supplies between sub-contractors and contractors, as defined by CIS, will be subject to the Reverse Charge unless the supplied contractor is also the end user.
This is a new and complex process and the clash with ‘Making Tax Digital’ is unwelcome, as businesses will need to ensure the software they use is capable of dealing with RC.
The Government Guidance Note can be found here
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