We are living in a state of unprecedented uncertainty. We don’t know if the UK will leave the EU on 31 October 2019 or not, although at the time of writing the current Prime Minister insists that this is the immoveable Brexit date. There may also be a general election before the year is out.
As a business it is sensible to prepare for all likely outcomes, so gearing up for Brexit can no longer be put off. This newsletter contains some advice about what you need to do if you are an importer or exporter, or if you sell electronic services across international borders.
HMRC has diverted staff to help with the Brexit preparations, and this is having a knock-on effect for other tax projects. The introduction of the VAT reverse charge system for businesses in the construction industry, which was due to come into effect on 1 October 2019, has been postponed for a year to October 2020.
If your business has already made changes to prepare for the construction industry reverse charge, such as altering your VAT period from quarterly to monthly, you can easily alter your VAT periods back to quarterly through your business tax account, or we can do that for you. If you have requested to leave the VAT flat rate scheme on 30 September, that decision can also be changed. HMRC will be sympathetic to businesses who need to make changes because of the short notice given for postponement of the reverse charge.
The Making Tax Digital (MTD) regulations came into play for most VAT registered businesses for the VAT period that began on 1 April, 1 May or 1 June 2019. However, some complex businesses have a start date for MTD for VAT as the period beginning on 1 October, 1 November or 1 December 2019. This may be another reason why the reverse charge for the construction industry has been deferred for a year.