Construction Industry given another year

We have welcomed this week’s announcement that local builders and construction firms will get an extra year to prepare for a major change in the way they account for VAT. 

 

Carmarthenshire accountants, Ashmole & Co, were concerned about the construction industry’s readiness for the new VAT reverse charge that was scheduled to be introduced from 1 October 2019 and were keen to see a delay. 

 

Some 150,000 businesses in the construction and building sector will be affected by the change. Ashmole & Co hope the delay to 1 October 2020 will lessen the likely flurry of disputes between suppliers and customers as to whether or not VAT should be charged. 

 

Jim Cornock, Partner with Ashmole & Co said, “This announcement is good news for local construction companies. There is substantial evidence of a lack of awareness of this change and a lack of preparedness even among those businesses who we have made aware of it. If the government had pressed ahead with a start this October, we envisaged significant confusion amongst local businesses, leading to disputes between suppliers and customers as to whether or not VAT should be charged.” 

 

A recent survey by the Federation of Master Builders indicated that 69 per cent of construction SMEs surveyed had not even heard of the new reverse charge. 

 

Jim added, “A start date of October 2020 is more sensible. This should allow time for a dedicated information campaign to be operated by HMRC and give local construction companies a chance to get their heads around the changes required.” 

 

Ashmole & Co Chartered and Certified Accountants have been established since 1897 and are one of the largest accountancy and auditing practices in Wales operating from 12 offices throughout south and west Wales including Swansea, Carmarthen and Haverfordwest. A significant proportion of the firm’s clients are builders/construction firms.