Questions and Answers
Budget 2024: When do I need to register for VAT?
I started a business this year selling homemade candles and it has taken off. I heard there are changes in Budget 2024 around when I register for VAT?
There were changes to VAT annoucned in Budget 2024. The VAT registration threshold is going to increase.
Value Added Tax, known as VAT, is a tax that is payable on sales of goods or services. You need to start charging VAT on your goods or services once your sales exceed a certain threshold.
You will need to register for VAT when your sale of candles exceeds, or is expected to exceed, €80,000. Until now, the VAT registration threshold for goods has been €75,000, so the threshold has been increased by €5,000.
The VAT registration threshold for the provision of services has also been increased to €40,000 (from €37,500).
Late VAT registration, errors, late VAT returns and late VAT payments can all lead to penalties and possibly interest being charged so it is important to register on time and keep on top of your VAT responsibilities.
For full details on how the budget may affect your business download our Budget 2024 Summary here.
Frequently Asked Questions
If a business's turnover exceeds €80,000 (for businesses supplying goods) or €40,000 (for businesses supplying services only) it must register for VAT.
Budget 2025 announced a change to the VAT thresholds. For those selling products the new cut off point is €85,000 and for those delivering services it is €42,500. The new thresholds come into effect from 01 January 2025.
A VAT Registration Number is mandatory for businesses exceeding the VAT threshold. It uniquely identifies a business for VAT purposes and must be included on all VAT invoices and returns. To obtain a VAT Registration Number, businesses need to apply through Revenue and provide necessary details about their operations.
You need to charge your customers a different rate of VAT depending on that you are selling. The standard rate of VAT is 23% but there are reduced rates for certain goods and services.
- Reduced Rate of 13.5% applies to certain goods and services and building services.
- Second Reduced Rate of 9% applies to items including newspapers, certain printed materials, and admissions to cinemas, theatres, and other cultural events. Also applies to electricity and gas.
- Super Reduced Rate of 4.8% applies specifically to the supply of livestock and greyhounds.
- Zero Rate applies to certain goods and services, such as most food items, children’s clothing and footwear, and certain medical supplies and services.
There are also certain services are exempt from VAT, such as financial, educational, and medical services.
A VAT invoice should include the following details:
- Date of issue
- Unique invoice number
- Supplier's name, address, and VAT registration number
- Customer's name and address
- Description of the goods or services supplied
- Total amount excluding VAT
- VAT rate applied and the total VAT amount
- Total amount including VAT
Date published 11 Oct 2023 | Last updated 11 Oct 2023
This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
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