From 1st March 2021 HMRC will be introducing a radical change to the way VAT is collected and administered. Currently, businesses pay VAT on their purchase of materials and services and charge.
VAT on their supplies. The difference between VAT charged, and VAT paid, is paid to Customs and Excise on the agreed basis.
From the 1st March 2021 before an invoice is raised, on any supply and install contract, a business will have to determine:
- Whether the customer is VAT registered,
- Whether the customer is registered for CIS,
- Whether the supply is within the scope of CIS, and
- Whether the supply is to a building or structure the customer will use themselves.
Should you have any queries with regards to this letter, please call 01636 700172.