Ad
Monday, June 2, 2025
17.1 C
London

U.K. Edition

Chancellor urged again to withdraw Reverse Charge VAT plan

- Advertisement -

A campaign calling on the Government to withdraw the implementation of Reverse Charge VAT is gathering pace after it was revealed it could cause a cash-flow crisis across the construction industry.

Over 150,000 businesses within the construction industry are set to see a 20% drop in cash flow when the planned VAT changes come into force on the 1st March. Many have said the impact of this could scupper the construction-led economic COVID recovery.

As previously reported in January the largest industry organisations and trade bodies supported a letter calling on the Government to scrap its VAT changes for construction.

Now the Construction Leadership Council (CLC) which represents the whole construction industry has taken the lead on again urging the Chancellor Rishi Sunak to withdraw the impending changes.

In a letter to the Chancellor, chairman of the CLC, Andy Mitchell wrote: “Despite the Government’s support, our industry remains in extremely challenging times as we continue to adapt to ongoing Covid-19 rules, mitigate the impact of Brexit and prepare for the forthcoming implementation of rule changes on IR35 and the Construction Industry Scheme.

It is also important to note that by continuing to operate the industry has suffered a serious financial impact as a result of project delays and costs incurred in adapting working practices.

This has resulted in many contractual disputes which our monitoring suggests are currently growing and which will accelerate further still.

We are currently quantifying the impact; however, it is reasonable to assume that without further financial support many companies will become insolvent.”

Referring to the Withdrawal of Reverse Charge VAT, Andy Mitchell added: “The implementation of Reverse charge VAT in April will restrict cashflow in our industry, especially to the smallest firms, at an extremely critical financial period for many businesses.

This policy risks reversing any recovery industry has made from Covid-19 and will limit the scope for protecting and creating jobs across the UK. As such, we call for the legislation to be withdrawn to help secure an economic recovery for the long term.”

The CLC hopes the forthcoming Spring Budget on the 3rd March will see Rishi Sunak make an announcement on Reverse Charge VAT and hopefully a change of direction.

See the full letter here: https://www.constructionleadershipcouncil.co.uk/wp-content/uploads/2021/02/Letter-to-Rishi-Sunak-MPChancellor-of-the-Exchequer-from-the-co-Chair-of-the-CLC_26-January-2021.pdf

- Advertisement -

Popular this week >

NASC Expands into Scotland with New Edinburgh Office and Key Appointment

The National Access and Scaffolding Confederation (NASC) has opened...

BSIF Urges Workers to Share Life-Saving PPE Stories

The British Safety Industry Federation (BSIF) is calling on...

Star-Studded Line-Up Announced for 2025 Scaffolding Excellence Awards

The NASC has announced that its prestigious Scaffolding Excellence...

Registration Opens for ScaffEx25 at Manchester Central

ScaffEx25, the UK’s leading scaffolding and access industry exhibition...

ScaffPlan Returns to ScaffChamp 2025 with Innovation in Tow

ScaffPlan has confirmed its return to ScaffChamp 2025 as...
- Advertisements -

Related Articles >

Mace Group Chairman and CEO chosen as new CLC Co-Chair

One of UK construction’s most recognised executives has been chosen to succeed Andy Mitchell as the new Co-Chair of the Construction Leadership Council. Following an open recruitment process, an independent panel comprising industry, members...

Latest Topics

CISRS Scaffolding Training Returns to Yorkshire with New Wakefield Centre

After years without a dedicated local provider, Yorkshire has...

Star-Studded Line-Up Announced for 2025 Scaffolding Excellence Awards

The NASC has announced that its prestigious Scaffolding Excellence...

Registration Opens for ScaffEx25 at Manchester Central

ScaffEx25, the UK’s leading scaffolding and access industry exhibition...

NASC Expands into Scotland with New Edinburgh Office and Key Appointment

The National Access and Scaffolding Confederation (NASC) has opened...
- Advertisement -

Popular Categories