VAT increase: Tax on most goods and services will go up from 17.5 to 20per cent from 4 January 2011, but zero-rated items will remain so for the next five years.
Undoubtedly there will be many retailers on both sides of the Border with conflicting views on this measure. It should also be noted that the timing of the change has been deliberately delayed to give retailers their ‘bumper’ Christmas and a decent start to the New Year but without the New Year’s day administrative and accounting headaches caused by the last increase from 15% to 17.5%. However ultimately the pinch will be felt by many businesses and individuals.
VAT on food and children’s clothes was not increased as expected and this will be welcomed by many in that sector.
Not quite a balance scorecard overall but Chartered Accountants Ireland is pleased to see that a number of the recommendations in our Pre-Budget submission made it into the Budget Announcements. Of course until we have a lot of these measures on the Statute Books it’s difficult to categorise the impact these will have and there are many other proposals worthy of mention for both good and bad reasons which we have not addressed in any detail here.