The reverse charge was due to come into force from 1st October 2019, however, the government has revealed that this has been delayed until 1st October 2020.
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Brian Berry, chief executive at the FMB, said: “I’m pleased that the government has made this sensible and pragmatic decision to delay reverse charge VAT until a time when it will have less of a negative impact on the tens of thousands of construction companies across the UK.
“To plough on with the October 2019 implementation could have been disastrous given that the changes were due to be made just before the UK is expected to leave the EU, quite possibly on ‘no-deal’ terms.”
This comes after a coalition of trade bodies demanded a delay to the VAT changes in a letter to the chancellor.