Budget updates that may impact the construction industry
On the 11th March 2020, the Chancellor delivered the Budget to Parliament, and to the rest of the country. There were plenty of updates (yes, some positive too!), but a few of these will have an impact on construction workers. If you’re a builder, then keep reading for the ones that you need to be aware of.
VAT Reverse Charge
As a construction worker, there’s a key change in the pipeline which you must be aware of. Businesses who operate through the Construction Industry Scheme (CIS), will have to change the way they handle their VAT as a result of the VAT reverse charge.
This had an original release date of the 1st October 2019; however, delays were put in place to give businesses time to not only get to grips with this new legislation, but to make sufficient preparation ahead of its arrival.
If you would like to find out more about how these changes could impact you and your business, we’ve constructed our very own guide to the VAT reverse charge.
Tackling Construction Industry Scheme (CIS) abuse
Unfortunately, non-compliant businesses often use the CIS to claim back tax refunds to which they are not entitled. The government has said that they will act, through legislating to prevent this practice from happening.
The government will also publish a consultation, introducing options on how to promote due diligence in the supply chain.
Stamping out tax abuse
Tax abuse will never be tolerated; however, the Budget announced a set of new targeted measures to stamp out tax abuse in the construction industry – so that’s great news for builders. They are also rolling out measures to prevent the promotion of tax avoidance schemes.
No change in the Aggregates Levy rate
The government will freeze the Aggregates Levy rate during 2020-21. They will also publish a summary of responses and government next steps, to last year’s review of the levy.
Tax changes for zero-emission vans
There’s never been a better time to be kinder to the planet, and in doing so, also kinder to your pocket.
From April 2021, if you own a zero-emission van within van benefit charge, the government will apply a nil rate of tax. By doing this, businesses could save an estimated £433 per van during 2021-22.
Increased costs or disruptions to cash flow due to the effects of COVID-19
The government is taking precautions to delay the spread of coronavirus across the country. As a result of these measures, many businesses could experience increased costs or disruptions to their cash flow.
The government will provide support to businesses during this period of uncertainty by either reducing their costs or bridging cash flow problems arising from the outbreak. Find out more about the measures the government is introducing to support business and the self-employed.
Construction workers have contributed towards the increase in housing supply across the UK, with over 240,000 new homes created in 2018-19. This is the highest level in 32 years.
The government has also committed to building at least one million new homes by the end of this Parliament, and an average of 300,000 homes a year by the mid-2020s.
Corporation tax to stay at 19%
The corporation tax rate is to remain at 19% during 2020, the lowest in the G20. This means that the UK will continue to be an attractive place to do business, whilst increasing funding for infrastructure.
Postponed accounting for VAT
From 1 January 2021, postponed accounting for VAT will return to the UK after a 35-year absence. This practice will apply to all imports of goods, including those from the EU.
VAT registered businesses integrated in international supply chains will receive a boost from this, as they adapt to the UK’s position as an independent trading nation.
Nice one, Brian
It’s hard to get your head around the world of finance at times, especially when new legislation and measures are released. We’ll take care of your tax rebate, leaving you to take care of your career. Give us a call on 0800 464 0359, or contact our team.