![]() We recommend that all affected CIS readers contact us so we can help you make the necessary changes to your invoicing and accounting software and reconsider the use of VAT special schemes if your continued use would adversely affect your cash flow. However, the change to DRC may create cash flow issues especially if you use the VAT Cash Accounting Scheme or the Flat Rate Scheme. It has been introduced as an increasing number of sub-contractors have been registering for VAT, collecting the VAT from their customers, and then disappearing without paying the VAT collected to HMRC. The change is described as the Domestic Reverse Charge (DRC) for the construction industry. I don't even know how AC3 DRC works exactly, or how it'd compare to applying compression 'manually' when encoding. Accordingly, the two amounts off-set each other. So Handbrake just uses the DRC information which might be present in an AC3 audio stream, only if you crank up the DRC value, I assume it applies it more enthusiastically. It has no effect on AC3 pass-through or on DTS or MPEG-2 audio. When contractors pay their sub-contractors’ VAT to HMRC they can claim back an equivalent amount as VAT input tax subject to the usual VAT rules. I've read about the DRC setting handbrake has built in but I'm a little confused on the codec situation - the documentation states that 'Dynamic range compression only works when the source audio is AC3 and you are encoding to another format, like AAC. HandBrake is a cross-platform application, available for. This does not mean that contractors, in most cases, are paying their sub-contractors’ VAT as an additional cost. HandBrake is a free and open source tool for converting video from nearly any format to a selection of modern, widely supported codecs. From 1 October this approach is changing.įrom this date sub-contractors will not add VAT to their supplies to most building customers, instead, contractors will be obliged to pay the deemed output VAT on behalf of their registered sub-contractor suppliers. ![]() In a nut-shell, if you are subject to the Construction Industry Scheme and if you are registered for VAT, from the 1 October 2019 you may need to change the way you account for VAT on supplies between sub-contractors and their contractor customers.Īt present, sub-contractors registered for VAT are required to charge VAT on their supplies of building services to contractors. We have alerted building contractors and sub-contractors in previous newsletters of changes to the VAT rules from 1 October 2019. ![]()
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