CONSTRUCT was one of the trade bodies that acted as a signatory on the letter sent to the Chancellor of the Exchequer, Rishi Sunak MP, calling to withdraw reverse charge VAT in construction. An initial letter was sent on 10 December 2020, and we have since followed up on the matter in a letter sent out on 14 January 2021 to continue to lobby against the introduction of reverse VAT. We recognise the detrimental impact that reverse VAT will have on the industry’s cash flow, especially if implemented at this time.
We will continue to call on Government to withdraw this policy in order to support the needs of the industry. You can read the letter sent to the Chancellor of the Exchequer here.
CONSTRUCT Chairman, Neil Marney, has commented:
The industry is struggling to make it through the pandemic, and introducing Reverse VAT on 1 March will push some firms over the edge.
This legislation will hit the cash flow of most of the construction supply chain hard. While order books still look bare, and higher wage costs bite as worker shortages due to Brexit and COVID-19 slow work, Reverse VAT will stifle an already fragile recovery.