Reverse charge VAT: hold off until 2020

August 8, 2019

The National Federation of Builders (NFB) has written to Sajid Javid MP, the chancellor of the Exchequer, asking for the 1 October 2019 introduction of domestic reverse charge VAT to be delayed until April 2020.

Reverse charge VAT means that the customer receiving the service will have to pay the VAT to HMRC instead of paying the supplier. The reverse charge applies through the supply chain where payments are required to be reported through the Construction Industry Scheme.

The NFB, together with other trade federations, has highlighted the effect the change will have on cashflow and administration costs for an industry already facing increased material and labour costs.

The guidance issued by HMRC was delivered late, is not clear and leaves some questions unanswered. A delay before introducing the charge would give the industry and government time to properly prepare the industry to understand the changes and update systems.

Richard Beresford, chief executive of the NFB said: “For an industry facing lighter workloads, increasing pressure on cash flow and an already high rate of insolvency, reverse charge VAT could not have come at a worse time. By delaying the introduction of this measure, the industry will have more time to properly prepare and make their businesses more resilient, and more detailed guidance can be provided to ensure a smooth introduction.”

The NFB is holding a series of Regional Construction Forums around the country in October and November 2019. Leading construction tax expert Liz Bridge will be offering practical advice on how to deal with reverse charge VAT.

For details of the nearest forum to you, go to https://www.builders.org.uk/events/ and book your free place.

National Federation of Builders

The National Federation of Builders is a United Kingdom trade association representing the interests of small and medium-sized building contractors in England and Wales.

You May Also Enjoy

Letting Agent Talk

Deposit Disputes Are Rising – Are Baths to Blame?

Interior Designers Say Acrylic Baths Are the Hidden Culprit in Family Rentals Deposit disputes over bathroom damage are rising, and acrylic bath surfaces are the overlooked culprit. Acrylic baths are often marketed as lasting 10 to 15 years or more, yet designers say many start to look tired in busy family homes within just a…
Read More →
Breaking News

Inheritance tax haul grows as more families are dragged into the tax net

Inheritance tax receipts got off to a slightly slower start in the first month of the 2026/27 tax year, but the figures still underline how rapidly the tax burden on estates continues to grow. HM Revenue & Customs (HMRC) collected £0.7 billion in inheritance tax in April, £65 million less than during the same month…
Read More →
Breaking News

The 10 biggest homebuyer turn-offs

From overgrown gardens to nightmare neighbours, homeowners across Britain could be knocking tens of thousands of pounds off the value of their property before a buyer even makes an offer.   New insight from House Buyer Bureau reveals the most common homebuyer turn-offs that could be thwarting your chances of making a sale, and the…
Read More →
Home and Living

5 trends driving London’s landscaped gardens

London gardens can add more than £205,000 in value as Chelsea tops table for prime buyers seeking outdoor space Ahead of this year’s Chelsea Flower Show, research by Enness Global has revealed that a garden can add more than £205,000 to the value of a London home, whilst Chelsea fittingly boasts the highest degree of…
Read More →
how to present your property for sale
Breaking News

Six in 10 tenants say Renters’ Rights Act improves their housing protections and conditions

Awareness of the Renter’s Rights Act 2025 has increased amongst tenants from 19 per cent in October after the bill passed, to 60 per cent when it came into effect 19 per cent of renters are now more likely to remain in their current property but 45 per cent are concerned about the legislation’s long-term…
Read More →
Rightmove logo
Breaking News

West Oxfordshire tops list of first-time hotspots defying national trend

New analysis by the UK’s largest property platform Rightmove reveals the first-time buyer hotspots where buyer demand is increasing, bucking the national trend over the last month West Oxfordshire leads the way, with demand for typical first-time buyer properties up by 45% year-on-year: A 37% increase in available first-time buyer type homes for sale and…
Read More →