Monthly Archives :

October 2020

Help With Self Assessment Deadline 150 150 Stepping Stones Accountancy

Help With Self Assessment Deadline

Do you know what the self-assessment deadline is? Do you know what expenses you can claim? This video will explain all about it.

VAT Reverse Charges for Construction Industry | Help with VAT Reverse Charges | Vat Advice for CIS | Construction Industry Scheme Advice Bristol
VAT Reverse Charges for Construction Industry 758 513 Stepping Stones Accountancy

VAT Reverse Charges for Construction Industry

Individuals operating in the Construction Industry need to be aware that from the 1st March 2021 there will be a change in how VAT will be handled. Originally these changes were due to start in October 2019, but they were delayed initially due to Brexit and then subsequently by the Coronavirus pandemic.

The VAT domestic reverse charges for the construction services is, in essence, an extension to the Construction Industry Scheme (CIS). It will apply to any business transactions between VAT registered contractors and sub-contractors that have to be submitted under CIS.

Reverse charges will apply when:

  • VAT is charged in regard to construction services and materials
  • VAT is paid at a standard or reduced rate
  • A UK project is initiated between a VAT registered supplier and a VAT registered customer
  • Both the supplier and customer are registered for CIS
  • Neither the supplier nor the customer is connected in any way

According to the HMRC, they have introduced this initiative to help combat fraud. There have been many cases where construction businesses charge VAT and then decide to stop trading which ultimately means that they take with them between 5% to 20% of additional profit due to the VAT that they have charged.

Ultimately, as with any change of this nature, a business will need to make some significant changes:

  • Staff will need extra training to recognise CIS projects
  • All accountancy and bookkeeping practices will need to be updated to account for the changes in invoicing and reporting obligations
  • The VAT Flat Rate Scheme can no longer be utilised
  • No cash payments can be accepted
  • The cashflow needs of a business will change and consideration might be needed to file monthly returns

In summary, the construction activities that VAT reverse charges apply to are:

  • A building or structure project that has some form of construction work which includes alterations, repairs, extensions or even demolition
  • Any work on a piece of land that includes construction activities for walls, power lines, electrics, water, pipelines and sewers
  • The installation of lighting, heating, air conditioning, power supplies, drainage, water supply and fire protection
  • Painting and decorating of any internal or external surfaces of a building

Should you have any questions or need any further information in regards to the VAT reverse charge scheme please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

Construction Industry Scheme (CIS) Refresher | Tax Advice for CIS | CIS Accountancy Help Bristol
Construction Industry Scheme (CIS) Refresher 758 513 Stepping Stones Accountancy

Construction Industry Scheme (CIS) Refresher

The Construction Industry Scheme (CIS) is a HMRC initiative where, if you work on a self-employed basis for a contractor in the construction industry (not as an employee), CIS rules state that the contractor needs to withhold tax payments from you at a rate of either 20% if you are registered or 30% if you are not. This is a slightly different set-up to other self-employed professionals who would receive gross payments with no tax is deducted.

It is not just typical construction work that the CIS covers, it can also include site clearing, repairs, demolition and decorating. The HMRC website has a very useful breakdown on what is included for the CIS – https://www.gov.uk/hmrc-internal-manuals/construction-industry-scheme-reform/cisr14000.

Anybody operating under the CIS needs to accept that, if construction services are delivered directly to a homeowner, then this work is outside of the scheme’s remit and customers will need a gross bill with no tax exclusions.

In essence you should register for CIS if:

  • You are acting as a contractor and using the services of self-employed professionals to complete construction work
  • You are acting as a self-employed professional offering construction services

If you have any questions in regards to CIS then our team would be delighted to help, please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

    Your Name (required)
    Your Email (required)
    Subject
    Message