To ask the Chancellor of the Exchequer, what assessment he has made of the effect of the construction industry VAT reverse charge on cashflow for small businesses in the context of the economic effect of the (a) covid-19 pandemic and (b) end of the transition period.
8 March 2021
The Government recognised that the introduction of the reverse charge will have an impact on cashflow for some affected businesses in the construction sector, and provided a long lead in time. The measure has also been delayed twice previously in order to allow businesses more time to prepare and also in recognition of the impact of COVID-19. HMRC have published guidance on reducing cash flow impacts and have written to affected businesses on three occasions signposting where to obtain information and outlining the steps they need to take to prepare.