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The Building Engineering Services Association (BESA) has urged businesses to prepare for changes to way VAT is charged, due to start in October. From 1 October HMRC will introduce VAT Reverse Charging on the majority of construction related services. Companies who are VAT registered and Construction Industry Scheme registered will no longer pay VAT to the majority of their subcontractors.
VAT will only be paid to firms who supply only labour (employment businesses) and to the merchants and businesses that sell building materials only without any fix. The purpose of the change is to combat VAT fraud perpetrated by organised crime gangs.
BESA has prepared a number of useful resources to prevent businesses getting caught out during the transition.
Head of Legal and Commercial Services at BESA, Debbie Petford says: ‘The majority of our members will be affected, so it’s absolutely vital that they understand these changes and are prepared.”
BESA has produced a webinar on VAT for members that can be accessed in the members’ area of our website. The Association also plans to do another one in September.
BESA members can access the guidance online here