Services

Tax-planning-and-preparation

VAT

At McMahon & Co, Kildare Accountants we will be able to analyse and understand how your business works and will be able to advise you the time to register for VAT, the basis and rates to charge most appropriate to your business.

Our services are specifically tailored to meet the needs of each individual client. Our consultants will work as closely as possible with you to ensure that the advice we give is both clear and cost-effective in relation to VAT.

We can help with the entire scope of VAT compliance issues, as well as providing valuable planning exercises which minimise VAT costs and maximise VAT recovery.

What is VAT?

VAT is what’s called an “indirect” tax, in that it’s not levied directly by Revenue.  It’s up to businesses to charge, collect and pass the tax on to Revenue.

New and changing legislation is ensuring that VAT remains a highly technical area with onerous reporting requirements.

Why should I voluntarily register for VAT?

So that you can claim a credit for the VAT on your purchases, bear in mind however that the purchases must be “wholly and exclusively incurred in the furtherance of trade” – meaning the item purchased must be a valid business expense.

Significant savings can be made if the structure of your business and its operations consider Value Added Tax implications at the outset.  To take advantage, you should consider VAT consultancy services from Frank McMahon & Co.

What are the VAT thresholds?

Currently in Ireland you are required to register for VAT if you provide, or believe you will generate turnover from the provision of services to the value of €37,500 in any continuous period of twelve months.  This increases to €75,000 for the sale of products.

Main VAT rates in Ireland:
  • Exempt – examples include certain financial, medical and educational providers.  They don’t charge VAT on their sales and are not entitled to claim VAT on their purchases.
  • Zero – the main example is providers of food and drink.  They actually charge a 0% VAT rate and are entitled to claim VAT on their purchases.
  • 13.5% – two examples are building services and photography.  They charge a reduced VAT rate and can claim VAT on their purchases.
  • 23% (Increased from 21% on 1st January 2012) – simply put, this rate is applied generally to all goods and services that don’t fit into any of the above categories.
What about VAT returns?

If you’re VAT registered you will need to submit your Form VAT3 return by the 19th day of the month following the end of the VAT period, which are typically two calendar months each.

How do I register for VAT?

VAT registration is done using the following forms

  • Form TR1 is used to register an individual, partnership, trust or unincorporated body
  • Form TR2 is used for registration if trading as a company.

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