FW: VAT Alert - Rate change 1 January 2012

 

VAT Alert – Rate change 1 January 2012                         VAT changes The standard rate of VAT will increase by 2% from 21% to 23% on 1 January 2012.   The standard rate applies to a wide range of goods and services including electronic products, motor vehicles, rents, adult clothing, telecoms services as well as legal and advisory services.   What are the implications for you?    The 2% increase will mean that accounting systems will need to be able to cater for a variety of scenarios. The VAT treatment attaching to supplies made and received is determined by a number of factors including: ·    is the supplier operating on the invoice basis or cash-receipts basis? ·    is the customer a business person or an unregistered individual? ·    has the customer made any advance payments (i.e. before an invoice has issued or a supply has been made)?   The following table summarises when VAT becomes due (which also determines the appropriate rate).   Business customer Private customer Supplier on invoice basis General position Invoice date (note: there are time limits in which invoices must be issued) Time of supply Advance payment 21% if invoiced before 1 January 2012 Time of supply Supplier on cash basis General position Time of supply Time of supply Advance payment 21% if received before 1 January 2012 23% if received after 1 January 2012 21% if received before 1 January 2012 23% if received after 1 January 2012   What should you be doing now? ·    you need to confirm that your accounting systems can cater for the change in the rate; ·    if you do not have full VAT recovery, you may want to consider acquiring large-value items in advance of the rate change. In certain cases, it may be enough for the supplier to issue the invoice before the end of the year; and ·    you may be able to invoice your business clients at the lower rate before year end which could generate a VAT saving for them if they do not have full VAT recovery.   Contact   Name Position E-mail Telephone Finbarr O’Connell Director finbarr.oconnell@ie.gt.com +353 (0)1 6805 771 Eamonn Murphy Director eamonn.murphy@ie.gt.com +353 (0)61 312 744 Sasha Kerins Director sasha.kerins@ie.gt.com +353 (0)45 448 852 Liam Kenny Director liam.kenny@ie.gt.com +353 (0)1 6805 840 Tom O’Reilly Manager tom.oreilly@ie.gt.com +353 (0)1 6805730   Unsubscribe If you wish to be removed from our mailing list please reply to this e-mail with REMOVE in the subject line.   Visit our website at  www.grantthornton.ie   This briefing is provided for general information purposes only and is not a comprehensive or complete statement of the issues to which it relates. It should not be used as a substitute for advice on individual cases. Before acting or refraining from acting in particular circumstances, specialist advice should be obtained. No liability can be accepted by Grant Thornton for any loss occasioned to any person acting or refraining from acting as a result of any material in this briefing. Grant Thornton, Irish member of Grant Thornton International, is authorised by the Institute of Chartered Accountants in Ireland to carry on investment business. © 2011 Grant Thornton. All rights reserved.

 

 

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