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