Important Information on Reverse Charge VAT for Construction Industry:

Posted: 11th September 2019

Construction and building businesses can breathe a sigh of relief, for the short while at least, as the Government has announced this week it is to postpone its plans to initiate a reverse VAT charge to the industry.

The change, that would have potentially had a damming effect on cashflow and working capital, was due to commence on 1stOctober this year. Now, just weeks away, the Government has made a shock U-turn and has postponed its plan for customers to pay VAT directly to HMRC, not the construction/building supplier.

Much of the industry was unaware of the forthcoming change, whilst those few who were aware were unprepared.

However, the postponement must not be ignored completely. The reverse charge will be implemented next autumn. In the meantime, businesses must get ready.

They must have the appropriate accounting set up, but most importantly be ready for the huge knock on effect it will have on cashflow and working capital.

Currently, a business can charge the VAT, take payment for the VAT and save the VAT – using it as a short term loan to invest, pay bills and use until they are due to pay their annual VAT tax returns.

From next year, they will no longer be able to do this. The charges will still apply and be included in customer invoices, but the customer will pay directly to HMRC. This is to avoid fraudulent activity over fictitious VAT charges.

Will you be prepared? Will you have enough cashflow and working capital to see you through 2020/2021? If you are at all worried you should speak to us. We are specialists in providing finance and funding options to businesses.

We have access to the whole of the UK lending market to bring you competitive finance options to best suit your needs.

As we are 100% independent we are not tied to any targets or contracts by lenders, we only approach lenders who will suit you and your needs; guaranteeing to find you the right finance, from the right lender, at the right rate, including...

Call the Cashflow Bridge team today to secure your tomorrow – 07917 871832 or 07902 032738 or email us at

Featured News.