The_Hustler
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"Where, after the making of an agreement for the supply of goods or services and before the date on which ...... any tax in respect of the transaction falls due, there is a change in the amount of tax chargeable on the supply in question, then, in the absence of agreement to the contrary, there shall be added to or deducted from the total amount of the consideration and any tax stated separately under the agreement an amount equal to the amount of the change in the tax chargeable."
The above is VAT legislation. Tax is due when the services are supplied as there is no requirement to invoice you in this case as you are a private individual (even if an invoice is sent). So unless you agree not to, an adjustment should be made for the rate change.
The VAT info leaflet from when the rate returned from 21.5% to 21% (http://www.revenue.ie/en/tax/vat/leaflets/vat-rate-change.html) seems to have some relevant information also:
Which VAT rate must the trader apply ?- general rule
2.1 The general position is that traders accounting for VAT on the invoice basis should apply the rate of VAT in force at the time they issue or are obliged to issue a VAT invoice, whichever is the earlier. In the case of transactions with private individuals, a trader should apply the rate in force at the time of the supply.
Invoices
4.3 VAT liability in respect of goods or services supplied to an unregistered person is normally determined by the date of supply and not the date of issue of the invoice, if any. Goods or services which are actually supplied to unregistered persons prior to 1 January 2010 are taxable at the 21.5% rate even though they may be invoiced on or after 1 January.
Contracts existing on 1 January 2010
7.1 Where a contract to supply goods or services is entered into before 1 January 2010 and the contract is not completed until after that date, then the agreed VAT inclusive price may be subject to an appropriate adjustment on account of the change in the VAT rate.
I must caveat the above to say that I do not have experience of VAT in my work, just in the tax institute exams.
An extract from our Part 3 manual says:
"Adjustment and recovery of consideration
What happens to the price stated in contracts if there is a change in VAT rate?
Section 35(1A) VATA72 provides that where a contract (for goods or services) is made for a price plus current VAT, or for a price including current VAT, and before the date on which the VAT becomes due there is a change in the rate of VAT then, in the absence of an agreement to the contrary, the change in rate is added to or deducted from the price.
To avoid any cost as a result of this, it may be preferable for the contract to have a fixed price exclusive of VAT and a VAT clause specifying the VAT payable as being that applicable when the supply is made or liability arises."
Apologies for the lengthy post.
The above is VAT legislation. Tax is due when the services are supplied as there is no requirement to invoice you in this case as you are a private individual (even if an invoice is sent). So unless you agree not to, an adjustment should be made for the rate change.
The VAT info leaflet from when the rate returned from 21.5% to 21% (http://www.revenue.ie/en/tax/vat/leaflets/vat-rate-change.html) seems to have some relevant information also:
Which VAT rate must the trader apply ?- general rule
2.1 The general position is that traders accounting for VAT on the invoice basis should apply the rate of VAT in force at the time they issue or are obliged to issue a VAT invoice, whichever is the earlier. In the case of transactions with private individuals, a trader should apply the rate in force at the time of the supply.
Invoices
4.3 VAT liability in respect of goods or services supplied to an unregistered person is normally determined by the date of supply and not the date of issue of the invoice, if any. Goods or services which are actually supplied to unregistered persons prior to 1 January 2010 are taxable at the 21.5% rate even though they may be invoiced on or after 1 January.
Contracts existing on 1 January 2010
7.1 Where a contract to supply goods or services is entered into before 1 January 2010 and the contract is not completed until after that date, then the agreed VAT inclusive price may be subject to an appropriate adjustment on account of the change in the VAT rate.
I must caveat the above to say that I do not have experience of VAT in my work, just in the tax institute exams.
An extract from our Part 3 manual says:
"Adjustment and recovery of consideration
What happens to the price stated in contracts if there is a change in VAT rate?
Section 35(1A) VATA72 provides that where a contract (for goods or services) is made for a price plus current VAT, or for a price including current VAT, and before the date on which the VAT becomes due there is a change in the rate of VAT then, in the absence of an agreement to the contrary, the change in rate is added to or deducted from the price.
To avoid any cost as a result of this, it may be preferable for the contract to have a fixed price exclusive of VAT and a VAT clause specifying the VAT payable as being that applicable when the supply is made or liability arises."
Apologies for the lengthy post.