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VAT Reverse Charge for Construction Services

2019-08-25T00:21:04+01:00September 1st, 2019|Categories: Articles & Guides, Blog, VAT|Tags: , , |

The VAT domestic reverse charge for building and construction services comes into effect from 1 October 2019. The reverse charge represents part of a government clamp-down on VAT fraud. A domestic reverse charge means that a contractor receiving a supply of specified construction services must account for the output VAT due, rather than the sub-contractor who supplied the services. The contractor also deducts the VAT due on the supply as input VAT, subject to normal VAT rules, meaning no net tax is usually payable to HMRC. The reverse charge thus removes the scope to evade any VAT owing to [...]

VAT reverse charge in the construction industry

2019-09-01T23:08:13+01:00December 17th, 2018|Categories: Blog, VAT|Tags: , , , , |

Autumn Budget 2018 announced a new measure, designed to counter fraud in the construction industry, which has seen gangs of criminal traders artificially extending the chain of supply of labour services, then failing to account for all the output VAT due to HMRC by collecting the VAT on the supplies (sales) and then going "missing" before passing the VAT on to HMRC. The proposed change, which is scheduled to take effect from 1 October 2019, will mean that for certain specified supplies of construction services, the customer will be liable to account to HMRC for the VAT in respect of [...]

November questions and answers

2019-09-01T23:07:45+01:00November 26th, 2018|Categories: Questions & Answers|Tags: , , , , |

Q. Are there any advantages to registering voluntarily for VAT even if my taxable turnover is less than the registration threshold? A. A business can register for VAT even if its turnover (total sales) is below the threshold and it may actually save tax by doing so, particularly if its main clients or customers are organisations that can reclaim VAT themselves. Say you want to purchase a new office printer for your business which costs £100 plus VAT, i.e. £120. You set the £120 paid out against your profits for income tax purposes. If you are a basic rate taxpayer [...]

How do I apply for Gross Payment Status? – CIS contractors

2019-09-01T23:06:48+01:00November 14th, 2018|Categories: Blog, Taxation|Tags: , , , , |

If you have a CIS registered limited company, obtaining gross payment status will allow you to be paid a gross amount rather than being taxed at 20% (CIS registered) or 30% (non-CIS registered). Having gross payment status is beneficial in that you can receive your gross income into your limited company without any deductions made. This means your income is not taxed at source and you only need to pay tax on a quarterly basis. Gross payment status is a level within CIS registration and is the preferred method for most construction workers, with most workers aiming to reach [...]

Obtaining Gross CIS Payment Status

2019-09-01T22:07:36+01:00September 11th, 2018|Categories: Blog, Taxation|Tags: , , , , |

Although the amount of tax ultimately paid on profits will be the same if you obtain CIS gross payment status, improvements in cashflow and reductions in the cost of credit, such as overdraft interest, should easily make the application process worthwhile. To be eligible to gain CIS gross payment status and receive payments from contractors gross, your ‘construction’ turnover, net of materials, has to be greater than £30,000. For partnerships and companies this limit increases by £30,000 for each additional partner or director, up to or exceeding £100,000. HM Revenue & Customs will apply 3 simple tests to determine [...]