Following the consultation on fraud on provision of labour in the construction sector, the government is to introduce a domestic reverse charge for VAT, in respect of construction labour supply, with effect from 1 October 2019. It will also use HMRC’s increased compliance activities to address the fraud identified in the Construction Industry Scheme.

Under the government’s proposals the customer in the transaction becomes responsible for accounting for the VAT but the government says it will ensure that sales to the final business or domestic customer are out of scope of the charge and that there will be no threshold.

HMRC is to publish draft legislation, as part of a technical consultation, in spring 2018, finalised legislation and guidance will be published by the end of September 2018 and legislation will be laid before Parliament after 1 April 2019.

See: https://www.gov.uk/government/uploads/system/ uploads/attachment_data/file/663934/Fraudon-provision-labour-construction-sector_ consultation-VAT-otherpolicy-options-responses.pdf