Call for delay to VAT changes

August 9, 2019

SNIPEF has joined 14 leading UK construction trade bodies in writing to the Government to share serious concerns regarding the implementation of reverse VAT charges, due on 1st October, calling for a delay in implementing the new rules.

If introduced, reverse charge VAT will have a significant negative impact on the industry, further increasing the burden on construction employers and seriously restricting cash flow in an industry that already suffers from late payment.

The reverse charge VAT could lead to a loss of productivity and reduced cash flow, leading job losses and tipping some companies over the edge. Small businesses are most vulnerable to potential damage, as they do not have the means to cope with further financial difficulties.

The letter to the Chancellor calls for the VAT changes to be pushed back by at least six months.

SNIPEF CEO Fiona Hodgson said, “We are extremely worried about the impact of the impending changes to reverse VAT and the subsequent effect it will have on SNIPEF members.

Many businesses in the construction industry are already suffering due to rising material prices, high labour costs associated with skill shortages not to mention payment issues. The introduction of the reverse charge VAT will only add to this burden, particularly for small contractors that may be forced to shut down if they do not have the resources to cope with the proposed change in legislation.

The Government have introduced this change with little or no consultation and need to listen to the industry and at the very least delay the implementation of the charge.” 

For more information please contact, or call 0131 322 6843

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