Business Round-up
VAT reverse charge on construction services delayed
HMRC has announced a five-month delay to the introduction of the domestic VAT reverse charge for construction services, due to the impact of the coronavirus (COVID-19) pandemic on the sector.
The change will now apply from 1 March 2021 and will overhaul the way VAT is payable on building and construction invoices as part of a move to reduce fraud in the sector. Under the domestic reverse charge, the VAT-registered businesses customer receiving the service will have to pay the VAT owed straight to HMRC instead of paying the supplier, if they report via the Construction Industry Scheme (CIS).
The change was originally scheduled to come into effect from 1 October 2019 but was deferred for 12 months after industry bodies highlighted concerns about the lack of preparation and the impact on businesses. The start date has now been put back from 1 October 2020 to 1 March 2021.
For businesses to be excluded from the reverse charge because they are end users or intermediary suppliers, they must inform their subcontractors, in writing, that they are end users or intermediary suppliers. This is to make sure both parties are clear in regard to whether the supply is excluded from the reverse charge. It reflects recommended advice published in HMRC guidance and brings certainty for subcontractors as to the correct treatment for their supplies.
HMRC stated that it will continue to focus additional resources on identifying and tackling existing perpetrators of fraud in the construction supply chain. It will also work closely with the sector to raise awareness and provide additional guidance and support to ensure all businesses will be ready for the new implementation date.
Pension savers warned over scams and transfers
The Pensions Regulator (TPR) has issued a warning to savers over the dangers of scams and making transfers during the coronavirus (COVID-19) pandemic.
The warning followed the publication of figures by Action Fraud, which showed that over £5 million of fraud has been reported since February, with reports totalling over 2,100.
According to the fraud prevention body Cifas, the most common COVID-19 scams Britons have been targeted with during the pandemic include pension scams, where fraudsters convince their victims to transfer their pension pots or release funds.
The TPR has also produced a factsheet for savers who have a defined benefit (DB) pension.
The factsheet tells savers that they do not need to rush a decision about their pension and should seek advice first. It also reminds DB pension holders that transferring into another type of arrangement is unlikely to be in their best interest.
Commenting on the issue, Charles Counsell, Chief Executive of the TPR, said: 'These figures once again show the true devastation of scams. We know, on average, victims of pension scams lose £82,000.
'Anyone can be a victim, and COVID-19 has created the sort of environment fraudsters thrive in. That's why it is vital savers don't rush decisions about their retirement funds.'
