{"id":23,"date":"2018-05-20T08:11:00","date_gmt":"2018-05-20T07:11:00","guid":{"rendered":"https:\/\/www.sage.com\/en-ie\/blog\/?p=23"},"modified":"2026-01-09T15:20:13","modified_gmt":"2026-01-09T15:20:13","slug":"how-to-make-sure-vat-is-never-a-problem","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-ie\/blog\/how-to-make-sure-vat-is-never-a-problem\/","title":{"rendered":"How to make sure VAT is never a problem"},"content":{"rendered":"
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\n\t\t\t\t\t\t\tGrowth & Customers<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t
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\n\t\t\t\t\t\tHow to make sure VAT is never a problem\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t

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\n\t\t\t\n\t\t\t\t\"Keir\t\t\t\tKeir Thomas-Bryant<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n\n\n

VAT can keep a business owner awake at night and can affect the bottom line if it\u2019s not managed properly. With many different rates and ever-changing legislation, Ireland\u2019s VAT system is one of the most complex in Europe.<\/p>\n\n\n\n

It can be difficult to know which rate to use: standard (23%), reduced (13.5%, 9%, 4.8%), parking (13.5%), zero rated, exempt or non-VATable. If a shopkeeper sells plain digestive biscuits, they attract the reduced rate of 13.5% VAT but chocolate biscuits are deemed as a luxury item and attract the standard rate of 23% VAT.<\/p>\n\n\n\n

Another example is the supply of certain items of food and drink to take away is liable to VAT at 0%. These include cold food such as sandwiches and yoghurts, and milk and certain milk-based drinks. However, where these items of food and drink are sold to \u2018eat in\u2019 in a coffee shop or snack bar, they become liable to VAT at the reduced rate.<\/p>\n\n\n\n

Fortunately, there are ways you can make VAT as painless as possible \u2013 by looking at planning and considering accuracy. Read on to find out more.<\/p>\n\n\n\n

Planning<\/strong><\/h2>\n\n\n\n

Sometimes businesses owners have a perception that when a sale is made, the full sale value belongs to the company. This is not the case; only the net value of the sale is theirs and the VAT account is owed to the Revenue \u2013 the business is simply collecting it for them.<\/p>\n\n\n\n

When businesses do not plan ahead and keep money aside for VAT, it can put cash flow under severe pressure, which can often cripple or close a business.<\/p>\n\n\n\n

Top tip<\/strong><\/h3>\n\n\n\n

You should lodge the VAT element of a sale into a separate bank account, so you are planning ahead<\/mark>, your cash flow is intact and your business has the money when the time to submit your VAT return comes around.<\/p>\n\n\n\n

Accuracy<\/strong><\/h2>\n\n\n\n

Data entry mistakes such as duplicate entries can lead to paying double the amount of VAT, losing a business money. If the return is processed manually or by people lacking the expertise to ensure the return is accurate, problems can arise.<\/p>\n\n\n\n

While there are businesses using an accounts software package to calculate VAT, there are numerous companies relying on spreadsheets and calculating VAT manually.<\/p>\n\n\n\n

Top tip<\/strong><\/h3>\n\n\n\n

Investing in the right accounting software<\/a> and expertise is essential to ensure accurate returns<\/mark>.<\/p>\n\n\n\n

Final thoughts on VAT<\/strong><\/h2>\n\n\n\n

The world of VAT is ever changing, with new legislation to be aware of. A lot of businesses might not know about every single change but their software providers should.<\/p>\n\n\n\n

Software providers need to be agile to changes in legislation to ensure they provide the software to keep their customers compliant.<\/p>\n\n\n\n

The right software, processes and expertise can help with the complexities of VAT, give businesses the freedom to succeed, explore new markets and have confidence to run their business effectively.<\/p>\n\n\n\n

Editor\u2019s note: This post was originally published in August 2013 and has been updated for accuracy and relevance.<\/em><\/p>\n\n\n

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Join 1.5 million subscribers and get the best business admin strategies and tactics, as well as actionable advice to help your company thrive, in your inbox every month.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\tSubscribe now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\"\"\t\t\t<\/div>\n<\/div>\n\n

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