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VAT changes questioned

Last minute appeal by housing associations has helped persuade the government to abandon proposed changes to VAT on design and build contracts, which the housing sector claims would have cost it tens of millions of pounds a year.

 

Following a European Court of Justice ruling, HM Revenue & Customs had proposed a change to the VAT rules for design and build, which would mean clients having to pay VAT on fees for architects and other tier two design professionals currently zero-rated under the procurement method.

 

However, HMRC has now opted to keep the current system in place following protests by charities and the National Housing Federation, which argued the tax change would have cost housing associations £108m over four years.

 

Author: Darren Revell

 

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