NFRC says extra few months ‘will be a lifeline for many construction firms’ but calls for Government to keep the policy under constant review as there’s ‘no guarantee that the industry will be ready for the changes next March.’
It has been announced that the domestic reverse charge VAT for construction services will be delayed for a period of five months from 1st October 2020 until 1st March 2021 due to the impact of the coronavirus pandemic on the construction sector.
In response to the announcement, NFRC Chief Executive, James Talman commented: “I am delighted that the Government have heeded industry’s call to delay this disruptive policy. Those extra few months will be a lifeline for many construction firms. This change would have dried up cash flow in the supply chain just as firms started to recover from the impact of Covid-19.”
He added: “However, there is no guarantee that the industry will ready for the changes next March, and we would like to have seen a longer delay, or even scrapping the idea entirely. The Government should keep this policy continually under review and consider extending this delay if needed.”