Vat Reverse Charging – 3 weeks to go!
There are just under three weeks left to prepare for upcoming changes to Reverse VAT Charging.
Reverse VAT Charging will – as confirmed in a recent letter from the Treasury - are still set to come into effect on 1st March 2021.
VAT Reverse Charging will apply to the following contracts:
• Those where the participants are subject to CIS.
• Those where the end-user (Employer) is retaining the built asset for their own use.
• Those where ‘sales’ comprise labour, material and/or plant.
• Those that may include an element of excluded sales but where those excluded items form part of the whole.
VAT Reverse Charging will NOT apply to the following sales / contracts:
• Sales entirely consistent of supply-only assets.
• Sales entirely comprising of the installation of security systems (burglar alarm) closed circuit television and public address systems.
For more information on Reverse VAT Charging, including HMRC webinars, template letters and spreadsheets, please visit ECA’s dedicated resources webpage here.
Building Engineering Business Survey 2021:
The latest quarterly Building Engineering Business Survey includes Member feedback on the introduction of Reverse VAT Charging. 140 Members responded to the questions on Reverse VAT Charging.
Over a third of responding Members (35 per cent) say they understand why RVAT is being introduced, but given the current economic circumstances, believe the measures should be further delayed, e.g. into 2022.
A further quarter (26 per cent) understand the rationale behind RVAT and say they accept the need for its introduction on 1st march 2021. Another quarter (24 per cent) believe the measure should still be scrapped, if possible.