Domestic Reverse Charge VAT
Domestic Reverse Charge VAT accounting for Construction Industry businesses comes into effect on 1 March 2021 and if you are affected you need to act now.
One of the most practical steps you can take if you are going to be making reverse charge supplies is to consider switching to monthly VAT returns.
This is because you will become a VAT repayment business as your VAT on purchases will exceed your VAT on sales. This is because you will not be charging VAT on your reverse charge sales.
Of course, if you also receive reverse charge supplies from sub-contractors down the line, you need to factor this into your considerations to see if monthly returns will work for your business.
Getting the timing of your monthly return application right to maximise the VAT saving is crucial and we can help you to work this out.
Please do not delay preparing yourself for the DRC because you are assuming that it will be delayed again. HMRC have said that it will not be and we must therefore prepare now before it is too late.
If you want to find out more about Domestic Reverse Charge VAT then please contact Haslers today.