Posted by Don’t just change your 23% rate code from 23% to 21%.
The new 21% VAT rate applies form 1st September 2020 to the 28th February 2021. You will need to revert back to 23% on 1st March 2021. You may already have a 21% rate you have not used in many years, you can use that code. Otherwise you may need to setup a new vat rate of 21% for both the Sales and Purchases VAT.
If you simply change the vat rate from 23% to 21% you may affect all previous transactions, and the vat calculated on those old transactions may be changed incorrectly.
Your bookkeeping software provider should be providing you with a method of updating your VAT rates to deal with the change. Call their support department to make sure you are prepared.
There are more complications for those using the cash receipts basis method of VAT calculation, so be prepared.
Also don’t forget about EU transactions, both imports and exports, and for both business transactions and consumer transactions. The imputed VAT amounts will change for those EU transactions. Read this from the Revenue Commisioners website
Here is a related article from Grant Thornton on what to look out for https://www.grantthornton.ie/insights/blogs/change-in-the-standard-vat-rate-from-1-september-2020/
Also from the Citizens Information website https://www.citizensinformation.ie/en/money_and_tax/tax/duties_and_vat/value_added_tax.html
Bookkeepers Ireland 