VAT challenges faced by businesses in 2021

It’s time for a Christmas sing-along. Not Christmas carols I am afraid but some well-known party numbers to remind us of the three major VAT changes that we had to deal with in 2021 and two other important issues which will take effect on 1 April next year. I have chosen six fantastic songs performed by top international stars so get ready to blast out these popular tunes.

Reverse charge for builders

My Way by Frank Sinatra

Despite a lot of protestations from builders accountants trade bodies and Uncle Tom Cobley the reverse charge rules for builders finally took effect on 1 March 2021. HMRC decided to do it ‘their way’ and pressed ahead with the new rules.

The principle is simple: instead of builders charging 20% VAT to their builder customers and accounting for output tax there is no VAT...