VAT Rate change from 21.5% to 21%, Budget 2010

Dec 10

As im sure you are now all aware the higher rate of VAT is decreasing from 21.5% to 21% as of the first of January.  Please find below the Domybooks quick guide for VAT registered companies to deal with this change:

Firstly traders whom account for VAT on the ‘invoice basis’ should use the rate in force on the date the invoice is raised even if the goods were supplied before that date.

In transactions with private individuals, traders should use the VAT rate in force on the date of supply.

Traders whom account for VAT on a ‘Cash receipts basis’ should use the rate in force on date of supply so 21.5% rate for payments received in 2010 but relate to supplies made in 2009.

Credit notes raised with a VAT amount should use the same rate as the invoice they relate to regardless of when raised.

That covers the common scenarios there is obviously further complexities in relation to hire purchase agreements, advance payments and contracts which I wont get into right now.

As always if you require any further information please email

vat@domybooks.ie

This is the Blog of an Accountant based in Galway providing Bookkeeping services and accountancy software

3 Comments

  1. Dec 11

    What a waste of time and money changing it by .5% and then back again. It is crazy.

    Reply
  2. admin
    Dec 11

    I completely agree Ruairi, The price variance with the UK is predominantly caused by the weak British Pound there is no point competiting using VAT rates.

    Reply
  3. Tansu CABACI
    Nov 9

    Nicely .

    Reply

Leave a Reply