Embedding the construction industry scheme into the VAT domestic reverse charge wasn’t a wise move, writes Chris Nyland (Scammell & Nyland).
Next Spring the domestic reverse charge for VAT on construction (‘the DRC’) turns three and it is increasingly apparent that there is a gap in taxpayers’ understanding of it. That is due to two crucial missteps by HMRC at the DRC’s inception namely that they (i) made the DRC contingent on the construction industry scheme (CIS) without considering – or at least explaining – its application and ramifications and (ii) distracted themselves and advisers by adding a notification requirement to end user status essentially making the DRC optional in certain circumstances.
The major consequence of those missteps is that a surprising number of end users receiving construction services think they...
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Embedding the construction industry scheme into the VAT domestic reverse charge wasn’t a wise move, writes Chris Nyland (Scammell & Nyland).
Next Spring the domestic reverse charge for VAT on construction (‘the DRC’) turns three and it is increasingly apparent that there is a gap in taxpayers’ understanding of it. That is due to two crucial missteps by HMRC at the DRC’s inception namely that they (i) made the DRC contingent on the construction industry scheme (CIS) without considering – or at least explaining – its application and ramifications and (ii) distracted themselves and advisers by adding a notification requirement to end user status essentially making the DRC optional in certain circumstances.
The major consequence of those missteps is that a surprising number of end users receiving construction services think they...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
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