The construction industry is another sector being badly let down by the UK Government. The decision of the Treasury to go ahead with the introduction of the Construction Industry VAT Reverse Charge with effect from 1 March 2021 is inexplicable, and industry representatives are deeply concerned about the impact of this ill timed plan on jobs.
Small and medium sized firms in the construction industry, who are still reeling from the impact of a prolonged pandemic and the disruption of the UK leaving the EU, are currently fighting to consolidate their businesses and protect any cash reserves they have after a devastating year. They cannot cope with this VAT Reverse Charge which will have a devastating impact on their cash flow.
The introduction of the charge at this time will put jobs and businesses at risk and may result in companies that survived the covid-19 outbreak and the UK's withdrawal from the EU being undone by this additional burden.
The UK Government needs to heed industry warnings and reconsider its decision to press ahead with the change at this time.
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