Here’s three of the latest VAT changes that you should be aware of:

Domestic Reverse Charge – Construction industry

HMRC’s new domestic reverse charge for construction services came into force on 1 March 2021 and is expected to have a significant impact on the accounting practices and cash flow of businesses in the sector.

Under the new regime, the recipient rather than the supplier is required to account for the VAT on certain construction services through its VAT return, instead of paying the VAT amount to the supplier.

If you’re acting as the ‘subcontractor’ and are VAT-registered, when you invoice the ‘contractor’, you should no longer charge VAT (assuming the criteria are met).

There’s more detail here on HMRC Website – Domestic Reverse Charge

 

Submitting VAT returns from April 2022

If you currently file your VAT returns directly via the HMRC website, this method of filing returns comes to an end in April 2022 – that HMRC VAT return filing page will no longer exist.

From that date, you will need to keep your records using separate software (irrespective of the level of your turnover), that files the return figures directly to HMRC.

If you’re still filing your VAT return figures directly via the HMRC website, please get in touch soon so we can help you comply with the new method.

If we prepare your VAT returns for you, then you’re already complying with the new way of filing.

There’s more details here HMRC website – VAT record keeping

 

VAT deferral

If you deferred VAT payments due between 20‌‌ ‌March and 30 June 2020 and still have payments to make, you should’ve paid by 31‌‌ ‌March if you can.

If you cannot afford to pay by 31‌‌ ‌March this year, you can now join the ‘online VAT deferral new payment scheme’ to spread the payment.

The new scheme lets you pay your deferred VAT in equal monthly instalments, interest free. You can spread payment across a number of months, depending when you join – the earlier you join, the more months you have to spread the payments across:

  • 10 instalments if you join by 21‌‌ ‌April
  • 9 instalments if you join by 19‌‌ ‌May
  • 8 instalments if you join by 21‌‌ ‌June.

You can join the scheme quickly and simply online, without the need to call HMRC. To find out more information, further details here – HMRC website – VAT deferral

The online service will close on 21‌‌ ‌June 2021 – if you want to join the scheme online, you must do so before this date.