Delay reverse charge to avoid construction chaos

The government has not prepared the construction industry for the reverse charge due in October and needs to delay its implementation to avoid chaos the Federation of Master Builders (FMB) has said in a letter to the financial secretary to the Treasury.

A survey of its members shows that more than two-thirds of small and medium-sized construction enterprises (69%) have not heard of reverse charge VAT. Further of those who have 67% have not prepared for the changes.

According to the FMB reverse charge VAT will have a serious impact on cash flow as well as being a significant administrative burden fundamentally changing the way construction companies invoice their clients and pay their taxes to HMRC.

FMB chief executive Brian Berry said: ‘Construction companies are struggling with Brexit uncertainty sky-rocketing material price rises and skill shortages. Reverse charge VAT is yet another thing for them to...