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UK Construction services: VAT – domestic reverse charge rules deferral until 1 March 2021

Subcontractor? Contractor? Work in construction? Registered for VAT? CIS?


Yesterday a further deferral by 5 months was announced on the introduction of the domestic reverse charge for building and construction services.  The new rules were due to come into force on 1 October 2020 (already deferred from 1 October 2019) but have been deferred again until 1 March 2021.


These rules apply to UK construction services provided by subcontractors to contractors within the CIS scheme.  Under the new rules a domestic reverse charge means the contractor who receives supplies of construction services from the subcontractor must account for the VAT due on these supplies on their VAT return, rather than on the subcontractor’s VAT return. 


HMRC have said, “To help these businesses overcome the effects that the coronavirus pandemic has had on them and give them more time to prepare, the introduction of the reverse charge has been delayed for a period of 5 months until 1 March 2021.”

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Farrell & Farrell CA Limited (trading as Farrell & Farrell) is registered in NI with registration number NI 639336. Registered with The Chartered Institute of Taxation as a firm of Chartered Tax Advisers. Registered to carry on audit work and regulated for a range of investment business activities by Chartered Accountants Ireland (CAI). Details about our audit registration can be viewed at www.auditregister.org.uk under reference number 3044856.