Please see our latest newsletter which highlights the main developments in yesterday’s budget. There are a number of small changes to tax rules which affect different groups of people, so please do contact us if you think you may be affected and wish to talk through your options. Tax is becoming more, not less complex and there may be further changes depending on the Brexit negotiations and the stability of the government.
Unusually, given Brexit and the government’s insistence on sticking to its timetable for Making tax Digital, there is a significant development in accounting for VAT on construction services. As from October next year, those services will be subject to a reverse charge, which means that business customers will be accounting for VAT on its purchases by way of a self-supply calculation. Although presented as an anti-avoidance measure, this will benefit businesses who have to account for VAT on invoices issued but do not get paid promptly and at the same time penalise those large organisations such as Carillion, which would have recovered VAT charged immediately, but delayed paying the suppliers for many months. If it proves to be successful, in my personal opinion, I would not be surprised to see this measure extended in due course to other sectors following Brexit.