The latest research shows that subcontractors are still facing delays before receiving VAT payments from HMRC, in the wake of changes that were introduced back in March.

The spring saw the ‘domestic reverse charge’ come into force. This meant that subcontractors who are part of the supply chain for the building industry were no longer given payments of 20% VAT when they submitted their outstanding bills to clients. Under the changes, the clients pay this money to the tax authority and it is then reclaimed.

It has left subcontractors having to make VAT payments to suppliers, while no longer getting them from their clients. Instead, they are supposed to be paid VAT cash owed on a quarterly basis by HMRC, but many have indicated that the tax body is frequently late in making these payments.

Often, complex tax rules are why many specialist contractors hire an accountant for subcontractors in Goole or wherever they are based to deal with them.

After the delays in payments were first revealed during the summer, new research indicates that HMRC has not improved. According to Construction Enquirer, the boss of one firm stated that the refunds for the last two quarters had still not been made. He then went on to say that HMRC had been unable even to provide a firm date when the VAT payments would be issued.

A second company boss added that the delays have come at a time when the sector is already dealing with shortages of supplies and rising wages and costs, putting subcontractors under unbearable strain.