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Discover why 175 businesses have voted our service as 5 star
Mitch Hahn
CEO - Nordens
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Discover why 175 businesses have voted our service as 5 star
Mitch Hahn
CEO - Nordens
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Discover why 175 businesses have voted our service as 5 star
Mitch Hahn
CEO - Nordens
Discover why 175 businesses have voted our service as 5 star
Mitch Hahn
CEO - Nordens
Discover why 175 businesses have voted our service as 5 star
Mitch Hahn
CEO - Nordens
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02085300720
enquiries@nordens.co.uk
The Retreat, 406 Roding Lane South, Woodford Green, IG8 8EY
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Are you CIS and VAT registered? If so, read on…
From 1st October, the government is introducing the “VAT Domestic Reverse Charge” (also known simply as “Reverse Charge”) for businesses involved in building and construction services.
What is the Reverse Charge?
The Reverse Charge is a way of passing responsibility for the reporting and paying of a VAT transaction from the seller to the buyer of goods or services.
So, instead of the seller paying the VAT, the buyer takes responsibility for it.
Why is this required?
This is an anti-fraud measure. It removes the opportunity for fraudsters to charge VAT and not pay it back to the Revenue. It has been introduced in response to the VAT fraud and organised attacks on the VAT system in the construction industry, and means that the government can try to reduce the risk of companies charging VAT on their construction services and then vanishing before actually paying it over to the Government.
Yes, it does happen – and we know of some actual instances! A client paid for building work, including paying the VAT of course, and they then reclaimed that VAT as part of their normal accounting process. However, the building firm vanished into the mist without handing over the VAT to HMRC.
A huge amount of revenue is lost in this way, so the new legislation aims to make sure it’s correctly paid; HMRC expects to bring in an additional £90m in tax revenue for the first year, then £140m in the following year.
How will it work?
When a transaction is subject to Reverse Charge, the person receiving the goods or services must report on their VAT return both of the following:
If you are the customer, you will have to account for the VAT amount through your VAT return instead of paying the VAT amount to your supplier. You will also be reclaiming that VAT amount as input tax (purchase VAT), subject to the normal rules, meaning that no net VAT is payable to HMRC.
If you are the supplier of the goods or services, you will still need to issue a VAT invoice that clearly shows that the supplies are subject to the reverse charge, but you must declare the net amount of the sale only (no VAT to be declared) on your VAT return.
Who will it affect?
The Domestic Reverse Charge will apply to you if you are in a business that is CIS registered, whether you supply or receive relevant goods or services.
There’s a long list of the services that are affected, which you can see here on the government website, or we can run through with you. Here are some examples – please note that this is not the complete list…
Exceptions:
As is often the case, there are some exceptions.
Example
A company called “The supplier” provides construction services to a company called “The customer” for the net amount of £1,000.00 plus VAT.
What will happen after 1st October:
When preparing the VAT return:
Confused? Don’t worry – that’s why we’re here!
Cash flow impact
The reverse charge will have biggest impact on small and micro businesses, particularly in respect of loss of cash flow where subcontractors will no longer receive the VAT, as some businesses use the VAT they collect from customers as working capital before they pay it over to HMRC.
HMRC understands the difficulties businesses may have in implementing the domestic reverse charge and will “apply a light touch” in dealing with genuine mistakes that occur in the first six months after introduction, where businesses are trying to comply with the new legislation.
You can read much more about the reverse charge on the government’s website, but it’s long-winded. If you have any questions, it’s better to simply get in touch with our VAT team and we’ll be happy to talk you through the process.
At Nordens, we're more than just accountants - we're business experts who can help you achieve your biggest goals.
Our specialist strategic division at Nordens boasts some of the leading entrepreneurial business minds in the country. We cater towards delivering consistent success stories, whilst helping businesses achieve above and beyond their initial goals.
Through highly-tailored guidance, coaching and advice, Nordens Strategic are able to define exactly how your business can reach new levels of success.
Regardless of how you define ‘success’ for your business, our strategic service is guaranteed to bring about real and lasting change. By partnering with some of the UK’s top business coaches, we’ll steer you along the path to a greater future.
Every business, no matter how big or small, needs to make the right decisions, and how to best manage your accounts can put huge question marks over your business. Accounting2You is here to take that pressure off and provide you with all the answers you need.
Our bookkeeping branch offers a fully inclusive, comprehensive service that you can trust. Since 2005, our specialist bookkeepers have been successfully managing the accounting of both individuals and small businesses.
With experts in payroll analysis, credit control and financial recording, Accounting2You will lead your business efficiently, and with real purpose, towards a prosperous future.
Voted as EXCELLENT - 9.9 out of 10 based on 167 reviews
Director - Metro Bank
Nordens are always very easy to deal with and extremely professional and efficient. I would have no hesitation in recommending them to my clients for their accountancy needs, no matter how complex they may be.
Co-Founder - Chicmi Limited
Very good to work with - the team go above and beyond to make the accounts easy and efficient. They're all super friendly and a joy to work with.
Director - Rose Opticians
I have been using Nordens Chartered Accountants for 5 years and very happy with the service provided. All members of the team are very knowledgeable and have a wealth of experience which has proved very beneficial to my organisation
Founder & Director - Physio LDN
Very easy to contact and put me in touch with the right person whenever I need to ask any questions. Extremely knowledgeable and can help me manage my various businesses whenever I need.
Principal - Pauline Quirke Academy
Great accountants, always available to offer advice. The team have transformed my business.
Founder - Dataphone
Having worked with Nordens over the last 5 years, not only to look after my annual accounts but they have also provided outstanding professional advice. They have guided me through a Company share buyback with clear and objective advice. We have also been using Nordens strategic services for a couple of years, which has helped bring about significant improvements that exceeded my expectations. With experience of working with several local accountants over my 29 years in business, I’m very pleased with the service I have received from Nordens.
Director - Linekers
Trusted our business with Nordens for over 10 years now and watched the company grow into the successful innovative business it has become today. Deservedly so. Every aspect of financial advice we need is always given promptly and with a smile. We have total confidence in all aspects of advice Nordens give. If you are looking for accountants, its a no brainer!
Founder - Foundation Sports Limited
A fantastic, modern, vibrant firm that care about the clients and their staff in abundance. It is rare to find an Accountancy firm with such vibrance and focus and relationships. It is no wonder they win award after award in their field.
Managing Director - Prime Time Boilers
I have been with Nordens for many years now and they are a great accountants.
Founder - Vivid Finishes
We have used Nordens for the last 5 years and have had a great service throughout. The guys are very passionate about what they do and have played a part in the growth of our company, highly recommended.
Managing Director - AMD Interior Architecture
Great Service at Nordens from a friendly very approachable team Particularly Kirsty Willis and Joe Sword who have been helping us since we started the business in 2016.
Director - Forma London
Nordens provide a first class service. We moved to Nordens last year and have been impressed with the level of service provided. Keep up the good work!
We've always got our ears to the ground when it comes to interesting, useful and topical information relating to business and accountancy.
We love making videos that break down convoluted accountancy jargon into plain-talking, actionable and accessible facts.
In November 2002, having sold our other business interests off earlier in the year, I decided to set up Nordens Chartered Accountants. The easy part was knowing how to do it, as I had established and built a smaller practice a few years earlier. The difficult part, for me, was not following the traditional accountancy path. Having run businesses, both successfully and unsuccessfully, I wanted to help business owners resolve their short term problems and work with them to achieve their longer term goals. Business has always been my interest and I love that I can help business owners achieve what seems like the impossible every single working day.
Mark Norden
Founder
Our limited company accountants have a range of qualifications from The Institute Of Chartered Accountants (ICAEW) to the Association of Chartered Certified Accountants (ACCA). We worry about the bye-laws, regulations and ethical guidelines of the ACCA so you don’t have to! That makes us an ACCA-accredited employer as well as a Professional Passport-accredited one!
At Nordens, we're committed to keeping our clients updated on all things business strategy and news. Each week we update our newsletter subscribers on what really matters in the big bad world of business. That way, you can stay one step ahead!
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Nordens is a trading name of Nordens Limited, a limited company registered in England under company number 04709951. Our registered office is: The Retreat, 406 Roding Lane South, Woodford Green, Essex, IG8 8EY.
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