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False dawn
Key points
- Costs falling partly within and without the construction industry reverse charge system.
- A single invoice covering both types of work will fall completely within the reverse charge.
- This does not mean that the full amount of VAT can be shown in both boxes 1 and 4 of the return.
- The same input tax tests as for a normal purchase invoice must be applied.
- Supplies that the reverse charge applies to are excluded from the flat rate scheme.
- Advisers may need to assure builder clients that there are no hidden tax windfalls in the new reverse charge system.
Do I think that HMRC was wrong to announce as it did in Revenue and Customs Brief 10/2019 a 12-month delay in the introduction of the new reverse charge rules for the construction industry until 1 October 2020? The simple is answer is ‘no’ and I give the policy team full credit for making a...
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