ACCOUNTANTS JOIN CALL TO DELAY CONSTRUCTION VAT CHANGE CHAOS
Leading accountants have joined the call to postpone VAT changes which could cause a cash-flow crisis across construction.
More than 150,000 construction companies are facing a 20% drop in cash flow when planned VAT changes come into force in October.
The “domestic reverse charge” changes mean companies in the construction supply chain will no longer receive their 20% VAT payment when they submit bills.
The VAT cash will instead be paid direct to HMRC by the customer receiving the service who will reclaim it in the normal way.
Accounting giant RSM has now joined the chorus of opposition to the scheme.
Ian Carpenter, partner at RSM, said: “This new measure will have a profound impact on a construction business’s invoicing routine.
“Further, it will have a serious cashflow impact, most likely in the early stages of the supply chain, where contractors will no longer charge and collect VAT from their customers.
“This VAT cash can sometimes be used by businesses to fund working capital, before it’s paid over to HMRC via its VAT return.
“Whilst this measure is being brought in by HMRC to fight fraud, the rules apply to all in the industry. Failure to comply will risk delayed payments by customers and penalties from HMRC.
“Businesses should be reviewing their supply chain now to get reading for the changes which are less than two months away.
“Better still, we would urge Government to consider delaying the implementation date to allow the sector a chance to properly prepare.”
YOU'RE REQUIRED: ALAN SUGAR URGES PUBLIC TO GET BACK TO WORK
Business tycoon Lord Alan Sugar today urged Brits to “put on a suit, put on a dress and get back to work” amid rising calls to kickstart the faltering economy. Speaking to LBC radio, Sugar ...
LOCAL LOCKDOWN GRANT SUPPORTS BUSINESSES FORCED TO CLOSE
New grants worth up to £1,500 will be available every three weeks to businesses required to close due to local lockdowns or targeted restrictions. The new grants come as the government ...
CITB TO REMOVE 5,000 SMALLER CONTRACTORS FROM LEVY SYSTEM
Around 5,000 smaller construction companies will not have to pay any levy to the CITB next year. The training body is raising its Small Business Levy Exemption threshold for employers with wage b ...
540 JOBS LOST AFTER NATIONWIDE ACCIDENT REPAIR SERVICES GOES INTO ADMINISTRATION
The repairer was sold to RunMyCar, keeping 80 sites open but resulting in the closure of 30 more. Nationwide Accident Repair Services has collapsed into administration, along with a number of its subs ...
VIRGIN ATLANTIC TO CUT ANOTHER 1,000 JOBS AFTER £1.2BN RESCUE DEAL
Virgin Atlantic is said to be preparing a further 1,000 job cuts, hours after securing approval for a £1.2bn rescue deal. The airline, founded by Sir Richard Branson in 1984, will announce the l ...
SELF EMPLOYED .. WHAT CAN I CLAIM AS EXPENSES?
If you're self-employed, you will have various running costs. Some of these expenses you can deduct on your tax return as allowable expenses. Allowable expenses do not include money taken from your bu ...