As you already know, HMRC’s legislation for Reverse Charge VAT for construction services was scheduled to come into effect on 1st October 2019. However, on Friday 6th September, HMRC published an article explaining that the introduction of this legislation has been delayed for a period of 12 months until 1st October 2020.
Even though these changes will not be implemented for another 12 months, you can find out how the reverse charge VAT will impact your business below across all Opera systems.
Latest Releases of Opera 3 and Opera II
The latest release of Opera 3 (version 2.61.02) and Opera II (version 7.81.02) included the changes for the Reverse Charge VAT for building and construction services, which would mean that the main contractor receiving the service will have to pay the VAT to HMRC instead of paying the subcontractor.
Some of the other changes include:
- the importer allowing reverse charge VAT sales, purchase transactions, and SOP Documents to be imported
- VAT codes can be set up for sales transactions that only update ‘Box 6’ on the VAT Return without the RC Sales-List option on the Company Profiles form being used
- Any invoices for building and construction services must not be included on the Reverse Charge Sales list.
Pegasus CIS (Version 4.10)
The latest Opera releases also support the release of Pegasus CIS (version 4.10). Pegasus CIS is available to allow users to continue processing building and construction services VAT invoices under the domestic reverse charge VAT mechanism.
If you are thinking of upgrading to the latest versions of Pegasus CIS, then you must also upgrade to either the latest version of Opera 3 or Opera II. If you are an existing Opera customer who operates in a building and construction industry but does not use Pegasus CIS, then you are subject to reverse charge VAT rules and will be required to upgrade to either Opera 3 or Opera II.
If you require more assistance on the upcoming reverse charge VAT feature and how it will affect you, please do not hesitate to get in touch with Synergy Technology on 0345 456 0050.