HMRC have announced a webinar to explain the recent changes to the way VAT is accounted for within the construction industry, changes which came into place in March 2021.
The webinar will explain when to apply the VAT reverse charge, how to show the reverse charge on invoices, and what to do if mistakes are made when calculating and applying the reverse charge.
During the live webinar, questions can be asked using an on-screen text box, allowing construction businesses the opportunity to understand how their business might be affected. The webinar will be offered on several dates, allowing businesses to attend on a date that suits their schedule;
- Thursday November 4th, 11:45 AM – 12:45 PM GMT
- Thursday November 18th, 1:45 PM – 2:45 PM GMT
- Thursday December 2nd, 9:45 AM – 10:45 AM GMT
- Thursday December 16th, 11:45 AM – 12:45 PM GMT
If you’d like to attend the webinar, you can register here.
What is VAT reverse charge in the construction industry?
Quite simply, the VAT reverse charge is the requirement that VAT registered contractors paying for construction services that fall within the Construction Industry Scheme (CIS), pay VAT for those services directly to HMRC, rather than paying the contactor, subcontractor or supplier.
The VAT reverse charge was introduced by HMRC to tackle VAT fraud. HMRC have estimated a loss of approximately £100 million due to VAT fraud whereby contractors pay their subcontractors and suppliers the full price for services including VAT, but the subcontractor or supplier then fails to declare the VAT to HMRC.
How can I prepare for the VAT reverse charge?
VAT reverse charge is here now and it’s important that construction businesses are compliant in order to avoid penalties and a run in with HMRC. There are three questions you should be asking yourself when it comes HMRC VAT reverse charge compliance;
- Are your accounting systems and software able to deal with VAT reverse charge calculations, invoices and payments?
- Will the changes have any impacts on your businesses’ cashflow?
- Are the people who deal with your accounting familiar with the changes to VAT calculation, and able to accurately carry them out?
With recent changes to the way VAT is calculated in construction, and the additional admin and cost this could cause, it might be the perfect time to consider our industry specific solution of Sage 200 for construction.
Sage 200 for construction not only automates CIS deductions, making VAT reverse charge a walk in the park, but it’s also fully Making Tax Digital compliant (which ticks off another box with HMRC). In addition to this, your construction business could also benefit from tailored solutions to project costing, project management, applications, valuations and retentions.
As Sage partners, Eventura has been delivering Sage 200 to construction businesses for almost 20 years. Our in-depth knowledge of the construction industry and its associated challenges means we can build a business solution that really makes a difference.
Our expert team of business analysts, developers, consultants and technicians can help you revolutionise your business, allowing you to go from strength to strength without the growing pains. If you would like to speak with one of our Sage 200 Constructions experts, you can request a free call back here.