REIMBURSEMENT FOR LOCAL CONSTRUCTION INDUSTRY, AND WHAT IT MEANS TO YOU

1. REIMBURSEMENT FOR LOCAL CONSTRUCTION INDUSTRY, AND WHAT IT MEANS TO YOU A N G CPA Professional Corporation - Chartered Professional Accountants of Ontario

2. From 1 October 2019, the UK will introduce a VAT tax on construction and construction services. The move is aimed at combating VAT fraud in the sector. Some of the areas that will have a major impact include cash flow and VAT compliance. When people in the construction and construction industry buy goods, they will be required to pay the VAT directly to HM Revenue and Customs instead of paying the supplier.

3. Rules The new rules do not affect provision for end users, those within connected groups, and those between homeowners and tenants. The rules apply only to individuals and businesses registered for VAT in the UK that provide certain services as defined in the Construction Industry Scheme (CIS). Exemptions also apply in cases where the service is limited to zero and where the customer is not registered for VAT in the United Kingdom. If you have not registered for VAT and you should have registered, why not sign up to speak to our chartered professional accountant Ontarioteam who will be able to assist immediately.

4. Refunds include Refunds include construction services that fall within the CIS definition of the construction operation. The broad definition includes services such as construction, expansion, repair, conversion, demolition or demolition of buildings/structures or infrastructure such as railways, waterways and roads. Drawing and decorating are also under this category. Specified services are excluded from home refunds, including the professional services of specific researchers, architects, and surveyors. Talk to Chartered Accountants if you are unsure of how this process works, our VAT Accountants are internally trained in the DRC and will be able to guide you with the most sensible solutions depending on your situation.

5. Home remittances are not entirely new. It already operates on goods and services such as chip chips, cell phones and telecommunications services. The accounting obligation for VAT issuance extends from supplier to customer. The purpose is to prevent the supplier from charging the customer what they think is VAT and then to flee from it and fail to include it in the HMRC. Home remittance

6. Therefore, from 1 October 2019, every company / registered VAT person in the UK who receives construction materials from another business / registered VAT person will have to submit a return home fee and must pay a rebate. on VAT refunds. Such persons / businesses are entitled to the same VAT refund in accordance with the general rules for obtaining VAT. Affected parties should be careful not to pay the VAT item to their suppliers where the applicable fees apply as the HMRC will still oblige them to pay VAT. Avoid serious mistakes when registering for VAT by talking to your accountant, make sure they use the right solutions and advise you on all possible situations. If your Law Firm AccountingServices is not ready for the DRC to speak to a doctor immediately because delays can lead to errors and penalties.

7. When will refund apply? The refund will apply throughout the supply chain until it reaches the end-user. The end-user, in this case, means someone who will not make money (trading) with building materials.

8. HMRC's announcement to launch the DRC in the construction and construction industry has been widely received. The provision of a detailed guide is long overdue, but it is still three months from the date of issue. Dispute surrounding repetitive domestic charges HMRC had informed industry players that there would be a one-year lead period (12 months). People who will feel the heat of the big contractors and subcontractors have hundreds or thousands of live projects. If you look at the amount of work that needs to be updated, and the collection of information needed, that is a very short time. Initially, the start date for the refund was set six months after Brexit and VAT's Making Tax Digital (MTD). However, the introduction of a rebate will almost certainly coincide with Brexit's day and MTD's deferred businesses. In that case, the domestic levy brings the number of major problems of the programs corresponding to October 2019 to three.

9. One more issue! Another issue arises from the details of the initial consultation. HMRC has proposed the implementation of the DRC's only workers' supply in the construction and construction industry, citing it as a source of VAT fraud that the move seeks to target. It is now clear that the new rules will only apply to the provision of construction services, including building materials. That is to say, the exclusion of hiring businesses that provide workers. Concerned parties, therefore, questioned how the refund would satisfy the HMRC's original purpose.

10. Final Call Finally, criticism emerged from the HMRC's broadcasting of this law for small contractors, and especially those working in small businesses. During the consultation, stakeholders requested that the HMRC be made available through warning announcements on the Builders' VAT page on the UK government website. However, this can only apply to existing legislation. The new guide is not readily available on v.UK, or on the HMRC announcements page. The question of whether small businesses will be ready by October 1, 2019, is the only thing that can be timed.