Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what further assessment his Department has made of the effect of plans to introduce a reverse VAT charge for building and construction services on the (a) liquidity of mid-market construction firms and (b) Government's infrastructure plans.

The Government remains committed to introducing the VAT reverse charge for building and construction. VAT fraud in this sector still presents a significant risk to the Exchequer.

There are several UK anti-fraud reverse charge measures and their impact on business and supply chains is now well understood and explained in the Impact Assessment. The Government has listened carefully to industry concerns regarding the impact of the Covid-19 pandemic and has further delayed the introduction of the reverse charge by a period of five months from 1 October 2020 until 1 March 2021.

HMRC will continue to work closely with the construction industry, providing support and communications to ensure that businesses are fully aware and can prepare for cashflow challenges ahead of the implementation date.