Changes to the way in which VAT is accounted for in the construction industry were originally due to come into force from 1 October 2019 but this was delayed shortly before the implementation date and pushed until 1 October 2020. As a result of the Covid-19 pandemic, this implementation date has been delayed further until 1 March 2021.

For many in the industry the impact of the changes remains unknown, but this delay allows more time to consider how your business will be affected and not have to worry about its implementation in the immediate aftermath of the pandemic.

Our full coverage of the detailed changes can be found here.

The new implementation date does ask some specific questions and may cause additional cashflow worries for some businesses. For example, the implementation date is close to 31 March 2021, the deadline by which all VAT liabilities deferred under the Government’s coronavirus support package fall due.

We would encourage all business who may be affected to start thinking about and planning for the changes as soon as possible. Once the potential impact on your business is known it may be possible to put changes in place minimise the effects. For example, you could look at switching to monthly VAT returns, the flat rate scheme or cash accounting schemes.