At Last Some Good News For Specialist Contractors!

It’s Wise Up Wednesday and there is at last some good news for Specialist Contractors. The government has postponed plans to implement VAT changes which could see 150,000 construction companies face a 20% drop in cash flow.

The reverse charge VAT change was due to come into force in October 2020 but has now been pushed back to March 2021 following industry lobbying.

It is the second delay for the plan which was originally due to be introduced in October 2019.

Construction leaders wanted to see the scheme put back to October 2021 “at the earliest”, but an update from HM Revenue & Customs has a revised implementation date of March 1 2021.

A Refresher About The Scheme

The “domestic reverse charge” is a scheme whereby Specialist Contractors in the supply chain will no longer receive their 20% VAT payment when they submit applications and/or receive payment.

The VAT cash will instead be paid direct to HMRC by the Contractor receiving the service who will reclaim it in the normal way.

The scheme was devised to combat VAT fraud, but it is a pretty blunt instrument that is going to have a massive negative impact on an unprepared industry.

Brian Berry, Chief Executive of the FMB, said: “That reverse charge VAT is being delayed by five months is a victory for common sense. The coronavirus pandemic has had significant impacts on cashflow for small to medium-sized (SME) construction firms.”

And the fact that he went on to say that; “In the meantime, the industry will continue working with officials in HM Treasury and HMRC to implement a communications campaign that prepares the industry.” just shows you how unprepared the industry is!

We will keep you posted and if it is going to go ahead in March 2021 we will bring you all the information and support you are going to need.

There’s Some Good News But There’s Some Bad News Too!

Around 35% of construction firms are reporting less than three months’ cash reserves in the latest industry survey taken by the ONS.

And worryingly, one in 20 of these firms (5.2%) reported they were walking a tightrope with less than one month’s cash!

Which means the likelihood of you not getting paid properly at some point has now increased dramatically.

So, now is NOT the time to be waiting for Contractors to pay you. Now is the time to be more vigilant and proactive than ever.

A Timely Reminder About Protecting Your Business

Here’s a timely reminder about protecting your payments. Please do not think that this is going to take care of itself, or that common sense and fair play will prevail.

Here’s a quick checklist for protecting your payments;

  • If you’re being delayed issue those notices
  • If you’re not getting paid suspend work if you can
  • Challenge spurious set offs
  • If you’re not getting paid take action sooner rather than later
  • Don’t procrastinate – escalate
  • Check the contract before you sign/start work
  • If you don’t know – don’t be afraid to ask!
  • Keep good records – at the end of the day evidence wins cases!

Visit Our website

There is a whole host of free information on our web site and there is even more information and cost effective support available through our membership services starting with Tribe at just £1.00 a day!

You can find Tribe here:

some good news

Just like our premium level services (all of which include Tribe), Tribe provides answers to the common business problems Specialist Contractors face every day. The difference is the price and the way you access the information. For just £1.00 a day you can help yourself to all of the following resources;

  • Ask Streetwise – Ask any question and get an answer
  • Is My Contract Onerous? – Contract checking service
  • Commercial and contractual information
  • How to get paid – advice and information
  • Business presentations – short helpful video presentations

And a whole range of other stuff that will help you in your business.

Some Good News – You Can Of Course Call Our Helpline

Our friendly team are on hand to ensure that you get the help and support you need to get paid and make a profit. Call us on 01773 712116 or email

Take action now to protect your business, your team, and your family.

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