Homebuilding is increasing
There has been an increase in home building in October with construction firms starting new projects. This could be due to the Government’s cut in Stamp Duty Land Tax (SDLT). This cut is saving home buyers thousands of pounds which is increasing demand very quickly. In fact, the number of new orders has increased at the quickest pace for almost five years. This increase in demand for homebuilding in construction is one of a few sectors that are managing to bounce back from the coronavirus pandemic. With many sectors struggling as we go into a second national lockdown.
How is the overall construction sector performing?
The construction industry is in a much better place than it was earlier in the year. The backlog of work kept many construction workers employed during the summer months. But, now this backlog is reducing. Overall construction activity has declined in October even though homebuilding has increased. But, the industry did report that new orders had increased suggesting that the outlook is bright for the construction industry. The increase in orders is mainly down to projects that were delayed by the global pandemic now being given the go-ahead. It has been indicated that the rate of job cuts in the construction industry would be lower than in the second quarter of 2020.
New VAT reverse charge rules
From 1 March 2021, the domestic VAT reverse charge must be used for most supplies of building and construction services. The charge applies to standard and reduced-rate VAT services:
- for individuals or businesses who are registered for VAT in the UK
- reported within the Construction Industry Scheme
If you have any questions regarding the VAT change or would like any advice, please contact our specialist VAT consultant Tony Nickson by email: [email protected] or on 0114 266 7141. Tony was formerly a VAT Officer in Customs and Excise and then Higher Officer in HMRC. After working in the VAT office for 20 years, Tony has gained a wealth of knowledge and experience in VAT processes.
How can we help?
At Hawsons we have a dedicated team of property and construction accountants at our offices in Sheffield, Doncaster, and Northampton. Having an accountant who understands the challenges of this dynamic sector and is able to help you plan for the future is an advantage in a competitive environment. At Hawsons we have a great deal of experience in advising and helping businesses in property and construction and we can assist you as your business grows.
Free initial meeting
Tax Partner, Sheffield