Heads up VAT changes 1st Oct

[fred]

I thought vat man had special status as creditor?

they do.

Problem is the money is long gone and all thats left is debt.

 

[V8Druid]

I thought vat man had special status as creditor?

they do ......... assuming there is any money to be had ... which is rare, for the 'pro' go busters to leave anything in the pot

 

[fred]

heads up Reverse VAT goes live in 5 weeks, 1st march.

If you are stopped CIS (or paid it gross) then you can no longer charge your customer VAT on your labour OR materials. You reclaim via your vat return.

Obviously this will hat cashflow for some subbies so may be worth switching to monthly vat returns.

VAT domestic reverse charge technical guide

Find technical information about the VAT reverse charge if you buy or sell building and construction services.

www.gov.uk

VAT domestic reverse charge for construction: 23 things you need to know

What is the VAT reverse charge for construction, which started on 1 March 2021? How does it work? Get the answers to these questions and more.

www.sage.com

 

[Jimoz]

I was hoping this would be put off again what a ballache. Currently subbing for a main contractor on cis

 

[Stubota86]

I was hoping this would be put off again what a ballache. Currently subbing for a main contractor on cis

First time I think it was cancelled a week or two before it was meant to roll out so you never know, although I guess gov needs money as quick as poss more than ever now.

 

[V8Druid]

First time I think it was cancelled a week or two before it was meant to roll out so you never know, although I guess gov needs money as quick as poss more than ever now.

nah .... they'll just print some more ..... reckon they have their hands pretty full ATM

 

[Brendan]

Doubtful it will be pushed back again, could force a few companies to go under who rely on the vat to keep afloat, monthly returns should sort that but could lead to people deregistering and doing alot of cash instead

 

[A9Driver]

We use quickbooks and I have asked them whats happening and got back

Here is some information in regards to the VAT reverse charges https://quickbooks.intuit.com/learn-support/en-uk/help-articles/vat-domestic-reverse-charge-for-buil... , our developers are working on it and soon as we get any more information we will let our customers know.

Its not long now

 

[Jimoz]

Doubtful it will be pushed back again, could force a few companies to go under who rely on the vat to keep afloat, monthly returns should sort that but could lead to people deregistering and doing alot of cash instead

Didn't you get the memo? @fred already been spanked for coming out with language like that!

I'm still ignoring the digital vat crap. Just doing it the old school way online. Turnover is above the threshold where you have to do the MTD so may well get a knock at the door in future.

 

[fred]

Doubtful it will be pushed back again, could force a few companies to go under who rely on the vat to keep afloat, monthly returns should sort that but could lead to people deregistering and doing alot of cash instead

no they wont.

Why would a main contract put themself in line for pokey to save a subbie vat they will be able to reclaim anyway ?

 

[Gunners]

Main contractors will be fine as the client pays them in full. Its when you subbie under CIS rules that you cant claim the vat.

 

[fred]

Main contractors will be fine as the client pays them in full. Its when you subbie under CIS rules that you cant claim the vat.

not really. Its the main contractors who have to police it they way its set up or they pay the mistakes when hmrc come calling. Lots of main contractors dont have a customer.

 

[T whiting]

Main contractors will be fine as the client pays them in full. Its when you subbie under CIS rules that you cant claim the vat.

Right this is getting worryingly near now I I don't think I have my head round it.

I'm subbing under cis so I don't get paid vat, yes?

And I have a machine cross hired in and because there exempt I have to pay them vat, yes?

So it sounds like I'm 40% out of pocket untill the vat return comes back as far as I can tell I can't split my invoice up so it's only the labour that gets reverse charged.

Any advice or is it just a bend over and take it?

 

[fred]

just go monthly vat, you will get the vat repaid before the customer pays the bill if they are on 30 days .

 

[Jimoz]

I'm on a 7 week job atm. Discussed options with the guy today.

Play it straight

invoice and don't bother with CIS as he knows I pay my corp tax, No cis, No reverse charge vat.

Backdated invoice to February and make it look like he's just paid late. Think he would be ok to stop me cis on this as you file your cis returns with payments made dates as opposed to invoice dates.

 

[fred]

he taking a massive risk there for you for no real reason. You wont be out of pocket a penny by playing it legal.

 

[Jimoz]

Yeh I'm not really bothered tbf the vat will sort itself out in the wash.

Where does this crap all end though. I've not bothered with any of that digital vat crap. It ain't broke don't fix it. My vat returns are always bang on.

 

[Jimoz]

Btw if a contractor doesn't cis you, and you pay your corp tax at year end what is he liable for? Why is construction the only industry not to be trusted to pay their tax bill.

 

[Brendan]

Btw if a contractor doesn't cis you, and you pay your corp tax at year end what is he liable for? Why is construction the only industry not to be trusted to pay their tax bill.

They can get a fine (upto 5k) and also of the subbie doesnt pay their tax bill the contractor can be shafted having to pay their tax too

 

[Monkeybusiness]

Btw if a contractor doesn't cis you, and you pay your corp tax at year end what is he liable for? Why is construction the only industry not to be trusted to pay their tax bill.

Because construction is full of bent builders who don’t pay tax and/or fold firms for fun. Material costs are high so there is a lot of vat collected but ultimately not passed on (buy all your materials in one quarter and claim all the vat/potentially trigger a rebate, invoice the client and then bump the firm in the next quarter to get all your money plus the gov’s 20% - start all over again the next day).
It’s also why CIS was brought in.
(I reckon most builders are essentially pikies but with older vans!)
GRENADE!!!!