Scaffolding Association urges construction businesses to prepare for VAT changes

The Scaffolding Association is urging businesses to prepare for major changes to the way VAT is charged in the building and construction industry, following recent reports that 150,000 construction firms could be affected. 

As of 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 labour only (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.

Robert Candy, chief executive at the Scaffolding Association, said: “The majority of Association members will be affected. So it’s absolutely vital that they understand these changes and are prepared.”

The FMB is putting forward a letter to Government requesting to delay the VAT changes by 6 months, the SA have signed it, along with SEC Group and other large trade associations. The letter is due to be sent 02nd August 2019