FINANCE
Brent Goodwin
Reverse charges for contractors
As of 1 October, the domestic reverse charge means that in many cases VAT on standard- rated and reduced-rated construction services must be paid to HMRC by the customer receiving the service or supply, rather than by the supplier as is currently the case. In essence, this will shift
responsibility for accounting for the VAT on “specified services” from the supplier on to the recipient – for example, from a sub-contractor to a main contractor. The reverse charge will only
apply to specified services reported under the Construction Industry Scheme (CIS) and that take place between VAT-registered businesses. The reverse charge will not apply if the service or supply is made to an end-user, or businesses connected to the end-user that falls within the definition of an intermediary supplier. Anyone currently on the
VAT flat rate scheme should not include reverse charge supplies in their turnover, but should deal with these outside the scheme. Brent Goodwin, VAT Manager at Newby Castleman, said: “I would urge sub- contractors or contractors on the flat rate scheme to reassess the benefits of remaining in the scheme, especially if a large number of their supplies are subject to the reverse charge; and, for those receiving or making reverse charge supplies, it’s worth checking software will be compliant with the new invoicing rules. “We would advise sub-
contractors and other workers affected to seek professional advice on the reverse charge and its implications.” The Federation of Master
Builders is calling for a six-month delay to the implementation of the reverse charge, so those affected have more time to prepare for the change.
90 business network October 2019
Improvements will be made to local roads in the region
Essential East Midlands road scheme is planned
Plans for three transformational road schemes in the East Midlands have been submitted to Government by sub-national transport body midlands Connect, with a funding request for £229m to deliver them. Midlands Connect was empowered by the Department for Transport (DfT) to work with the 22 councils in its partnership to identify priority schemes to improve local roads in the region, as part of a £3.5bn national fund available from 2020-2025. The fund covers upgrades to the Major Road
Network (MRN), a new category of the busiest and most economically important local authority A roads. The MRN was established by Government to focus on funding schemes that will reduce congestion, support housing and employment growth, encourage people to walk, cycle and use public transport, and provide better links to motorways and major trunk roads. The £3.5bn Government fund also includes Large
Local Majors (LLM) schemes, which focus on bigger upgrades to local roads. MRN schemes must include a Government funding
request of £20-50m each, and LLM schemes more than £50m, with a local contribution of at least 15%. Following detailed consultation and a rigorous
assessment, Midlands Connect has submitted seven priority MRN schemes and four LLM schemes to the DfT for consideration. The East Midlands schemes submitted by Midlands
Connect come with a request to the Government for £229m to deliver them, with another £66m funded locally. The total Midlands-wide funding request to the Government is £596m, with an additional £143m funded locally from a mixture of public and private sector sources. If successful, local authorities would deliver the physical infrastructure required. Simon Statham, Midlands Connect’s Head of
Technical Programmes, said: “A reliable transport network is essential to the success of the Midlands. The Major Road Network targets funding specifically at schemes that help improve job opportunities, open up new housing developments, and importantly address our environmental obligations as well. Objectives for the funding include understanding how a scheme will
The MRN and LLM schemes in the East Midlands submitted to the Government include:
• A511 Coalville Growth Corridor, Leicestershire (MRN): nine junction improvements, local widening and a new link road connecting the A511 to Bardon Link Road.
• Chesterfield-Staveley Regeneration Route, Derbyshire (LLM): a new 5.7km single carriageway, connecting the A619 north of Chesterfield town centre to the A6192 and A619 at Staveley. The route is critical to the North Derbyshire Growth Zone, with 5,700 new jobs planned, and provides access to the HS2 Infrastructure Maintenance Depot at Staveley.
• Another East Midlands MRN scheme, improvements on the A614 from Ollerton to Lowdham in Nottinghamshire, has already received a funding commitment of £18m from Government, announced in October 2018. Midlands Connect submitted the scheme following a request to put forward those that could be delivered early in the 2020-2025 period, and therefore needed an earlier funding decision.
create improvements for all road users, not just cars, and improve air quality by reducing congestion. “By speaking with a collective voice on behalf of the Midlands, we believe each of the schemes submitted has provided all the evidence Government needs to fund them in full, and we expect to be celebrating a £600m investment in to the region to help our local authorities get on and deliver this transformational programme of upgrades.” Midlands Connect is encouraging Government to
allocate funding for shortlisted schemes as soon as possible to ensure their smooth delivery.
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