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

how to present your property for sale
Estate Agent Talk

We’ve got the visitors. Now we need your listings.

Sponsored content, paid for by Domovita. More than 10,000 people a month come to Domovita, and nearly nine in ten of them arrive on a sold-price page for one particular street, looking up what the houses there went for. You can look up your own patch here. What those people don’t find yet is enough…
Read More →
Breaking News

Housing market hit by £18m increase in fall-through costs in Q2 2026

The latest Fall-Through Index by the House Buyer Bureau reveals that the number of property fall-throughs across the UK increased by 6.6% during the second quarter of 2026, resulting in an additional £18.3m in costs to the housing market compared to the previous quarter.   House Buyer Bureau analysed the latest data from TwentyCi on the…
Read More →
Breaking News

More than half of ‘Mumlords and Dadlords’ give rent back to help children buy their first home

54% of parents return some or all of the rent paid by their adult children to help them save for a deposit Just over a third say their children are living at home specifically to save for a house deposit; 45% say they feel like a landlord to their own child Parents charge £303 a…
Read More →
Breaking News

The First-Time Buyer Reality Shock

The First-Time Buyer Confidence Gap: 90% Feel Prepared, 71% Get an Unpleasant Surprise The First-Time Buyer Anxiety Index unveils a major ‘confidence gap’ which leaves first-time buyers unprepared for the realities of getting on the property ladder. Nine in 10 first-time buyers believe they are prepared and understand the home buying process before they begin…
Read More →
Breaking News

£50k hit when climbing the property ladder

The average homeowner in England faces an estimated £15,513 in associated costs when upsizing their home, according to the latest research by Yopa. However, in London this figure climbs as high as £47,704. The full-service estate agency analysed the estimated cost of upsizing across England, based on selling an average flat or terraced home and…
Read More →
Estate Agent Talk

Conveyancing causes more stress than property chains

The latest research by Lyons Bowe has found that 42% of recent homebuyers say conveyancing is the biggest barrier to a smooth property transaction, compared with just 19% who point to property chains. The survey of 1,000 recent homebuyers* examined which aspects of the transaction process had presented the biggest barriers to a smooth journey,…
Read More →