CECA: Government Decision To Delay VAT Changes “Tremendous News” For Industry

CECA has hailed the Government’s decision to delay potentially damaging VAT changes for construction companies, announced late on Friday (6 September), as “tremendous news” for industry.

Reverse charge VAT was due to come into force from 1 October 2019. However, the Government has announced its decision to delay implementation until 1 October 2020 after a coalition of construction organisations, including CECA, wrote to the Chancellor to point out the damaging impact this policy would have on the sector.

Since its announcement, CECA has warned that industry is unprepared for the changes to VAT, that implementation of the policy just before the UK leaves the European Union would create greater uncertainty for industry, and that if implemented  the policy could lead to a loss of productivity, reduced cashflow, and in the worst cases, undermine jobs and directly threaten small businesses.

Commenting, CECA Chief Executive Alasdair Reisner said: “The Government’s announcement that it will delay the implementation of reverse charge VAT for construction companies by a year is tremendous news for industry.

“I would like to congratulate all those organisations that have worked with CECA to point out the perils of implementing this policy at the present time to Government.

“Our members desire business certainty to create the optimum environment to deliver the schemes that drive economic growth across the UK. With the UK on the point of imminently leaving the European Union, the proposed changes to VAT represented a potential time bomb for many businesses in the infrastructure and wider construction sectors.

“Now it is vitally important that industry works together with Government to make sure we are ready for the implementation of reverse charge VAT in October 2020 by ensuring CECA members and their supply chains are prepared for the policy over the course of the next twelve months.”