Important Information regarding how the new VAT domestic Reverse Charge for building and construction services affects supplies from a Recruitment Business.
As most Construction businesses will no doubt be aware, a VAT Reverse Charge was to have been applied to the construction sector on 1st October 2019 but was delayed twice.
The legislation will now take effect from 1st March 2021.
Further information on the full scope of the new reverse charge and how it will operate can be found in this guidance note, updated by HMRC on 24th September 2020.
Under this new legislation, there is no requirement for Bamford Contract Services Ltd to change the way that VAT invoices are currently raised for services to its construction clients, so VAT invoiced and collected will continue to be paid directly by Bamford to HMRC in the usual way.
Please refer to section 3 of HMRC's VAT reverse charge technical guide for further information.
"Employment businesses are treated differently for the purpose of the reverse charge. Supplies by employment businesses are not subject to the reverse charge, even if those supplies are within the scope of CIS."
This information does not constitute VAT advice and is meant for general information purposes only.
For further information, please contact your local VAT office or follow the links above to HMRC guidance documentation.