Lastest VAT news from HMRC
VAT deferral new payment scheme
Opt-in from the end of February 2021
If you deferred VAT due from 20 March 2020 to 30 June 2020 and still have payments to make, you can opt into the VAT deferral new payment scheme to pay your deferred VAT over a longer period.
The VAT deferral new payment scheme is expected to open 23 February 2021 and close at the end of June 2021. If you opt-in you can make up to 11 smaller monthly instalments, interest free.
You can opt into the scheme online without the need to call.
If you can pay your deferred VAT by 31 March 2021 you should do so.
More information can be found here www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19
VAT reverse charge for construction and building services
The reverse charge measure is coming in on 1 March 2021.
Every VAT registered construction business will have received an individual letter in January (further to letters sent in February and September 2020), advising them to check if they might be liable for the reverse charge. If they are liable, they should start to prepare now.
The key aspects are:
- It will apply to standard and reduced-rated supplies of building and construction services made to VAT registered businesses, who in turn also make onward supplies of those building and construction services
- The contractor will be responsible for paying the output VAT due rather than the sub-contractor, and can continue to reclaim this amount as input tax
- The scope of supplies affected is closely aligned to the supplies required to be reported under the Construction Industry Scheme, but does not include supplies of staff or workers for use by the customer
- The legislation introduces the concept of ‘end users’ and ‘intermediary suppliers’ – this covers businesses or groups of associated businesses that do not make supplies of building and construction services to third parties and as such are excluded from the scope of the reverse charge if they receive such supplies, examples include landlords, tenants and property developers
More information can be found here www.gov.uk/guidance/how-to-use-the-vat-reverse-charge-if-you-buy-building-and-construction-services