Preparing for the CIS Domestic Reverse ChargeNikki
HMRC’s new Domestic Reverse Charge (DRC) scheme has been delayed until October 2020, giving businesses more time to prepare. If you’re not sure what this means for your business take a look at our short guide to the Domestic Reverse Charge or our earlier blog post here,
Use the extra time to ensure that your business is ready. We’ve put together a checklist of things to think about before the changes take place.
- If you are currently registered under the flat rate scheme, you may need to leave this before October 2020. HMRC encourages businesses to check with a professional adviser to see which option is best for them.
- Review all existing contracts to see if they need to be adjusted to reflect the reverse charge. Any projects existing before October 2020 and continuing afterwards will need split treatment.
- Make sure your accounting systems and software are updated to deal with the reverse charge changes. Sage 50 Accounts allows you to take control of your finances with ease, efficiency and accuracy to help you manage the process.
- Will the changes have an effect on your cashflow? If you think so – what systems can you put in place to protect your business?
- Educate affected staff members on the domestic reverse charge and how it will change their job role.
- Subcontractor’s will need to confirm with their customers whether the reverse charge applies to your contracts with them. You will also need to confirm whether they are the end user of the service and keep this on record.
- Moving forwards, you will need to check whether new customers are VAT registered. If they are, you will need to issue VAT invoices stating that the domestic reverse charge is applicable but do not include this in your total. The liability will pass to the recipient of your services, who must pay the VAT to HMRC.
For help ensuring your accounting software is prepared for the DRC changes, speak to one of our experts by calling 0121 323 2304 or emailing firstname.lastname@example.org.