13.5% VAT Rate Increase for Hospitality, Entertainment and Hair Cuts

Many of the budget announcements made last year have come into effect since January 1st..

One of the biggest changes that consumers are experiencing is the 13.5% VAT rate increase on tourism, hospitality and entertainment. It was at 9%.

In last year’s Budget announcement, Minister for Finance, Paschal Donohue said a review of the 9% VAT rate had found that the measure had “done its job“.

He said in the new economic reality, it was appropriate to increase the rate of VAT in the tourism sector to 13.5% from January 2019.

In addition to the hospitality sector, VAT on hairdressing, barbers, cinemas, museums and short term accommodation which was reduced to 9% will be increased.

The 13.5% VAT rate, known as the reduced rate of VAT (normally 23%) is applied to certain goods and services which include:

  • certain fuels
  • certain building services
  • repair services
  • cleaning and maintenance services (generally)
  • certain photographic supplies
  • the importation of certain works of art and antiques
  • the supply of food and drink (excluding alcohol, soft drinks and bottled water) in the course of catering
  • the supply, by means of a vending machine, of food and drink that would otherwise be zero-rated
  • hot take-away food and hot tea and coffee
  • hotel lettings, for example, guesthouses, caravan parks or camping sites
  • admissions to cinemas, theatres, certain musical performances, museums, art galleries or exhibitions
  • amusement services of the kind normally supplied in fairgrounds or amusement parks
  • hairdressing services
  • the supply of live horses, other than those normally intended for use in the preparation of foodstuffs or in agricultural production
  • hire of horses
  • supply of greyhounds
  • certain printed matter, such as brochures, leaflets, catalogues or printed music (different rates apply to books and newspapers)

If you operate in the hospitality, entertainment and hairdressing industry, you should be applying the 13.5% VAT to your sales from 1st January 2019.

If you have any questions, please do not hesitate to contact John or the team at TaxPlus Accountants. Contact us on 041-9844525/21 or email info@taxplusaccountants.ie

 

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