As previously mentioned, and after a number of delays it appears that the VAT Reverse Charge Scheme will go ahead next spring and HMRC have finally published detailed guidance.  At risk of stating the obvious we often work in extended supply chains in the construction industry, and the primary driver for this piece of legislation is to combat VAT fraud in those supply chains.  As I mentioned in my last up date (and it’s worth repeating) across the economy as a whole 4% of due VAT goes missing – companies go bust without paying the VAT that is owed, some dishonest business owners dramatically falsify their accounts or simply steal the VAT owed, etc…but that figure is a whopping 14% in the construction industry, hence the change.

HMRC Guidance
HMRC have recently published their technical guidance on the VAT Domestic Reverse Charge which includes useful definitions of the difference between a supply of staff and supply of a labour only subcontractor. Click here to read HMRC’s full guidance.