# One rate of VAT?



## Shawady (8 Dec 2009)

Does anyone know why we have two VAT rates?
Would it make more sense just to one common rate of say 15 or 16%?


----------



## Graham_07 (8 Dec 2009)

We actually have 4 rates (ignoring zero rating & other EU issues ) :-

0% , 5.2% 13.5% and 21.5%, the goods and services at each are covered in Revenue's Guide to Value Added Tax. 

The so-called "luxury goods" and certain professional services traditionally attracted the higher rates. A lot of staple foodstuffs attract 0% . Historically the reason may have been to relieve the basics/essentials and tax the luxury items. However over the years this has muddied quite a bit.

There was a situation many years ago where electrical items such as fridges attracted what was then the higher 35% rate but televisions attracted the lower 23% rate. Someone obviously believed that a TV was more of an essential than a fridge.


----------



## bridan90 (11 Dec 2009)

If you buy a sandwich and a cup of coffee to take away from a Mace Supermarket can they charge you 21% vat?


----------



## Graham_07 (14 Dec 2009)

21.5% would not apply however depending on the way the sale is managed could be 0% or 13.5%. There are also rules on items supplied for an inclusive or meal deal price. The Revenue guide on this is here . Hot or cold can have a bearing on the rate of VAT chargeable. I do not see that a sandwich (hot or cold) and a coffee should be 21.5%. The most should be 13.5%. 

A cold sandwich sold in a supermarket for take away would be 0%. 
A coffee would be 13.5% ( as it is hot ) 
A cold sandwich and a coffee sold for an inclusive price would be 13.5% for the lot.
A cold sandwich and a milk would be both 0%
A hot breakfast roll and a tea would both be 13.5%
Ice cream sold as part of a meal in a restaurant would be 13.5% but sold to take away in a shop would be 21.5%.


----------



## Domo (14 Dec 2009)

The rate is 4.8% - not 5.2% for agricultural priduce and livestock


----------



## Setanta12 (14 Dec 2009)

Under a European directive, we've committed to (basically) four different rates, and we're only allowed to move the rates within narrow ranges.


----------



## Graham_07 (14 Dec 2009)

Domo said:


> The rate is 4.8% - not 5.2% for agricultural priduce and livestock


 

[broken link removed]
Suggests that it is 5.2%.


----------



## Joe_90 (20 Feb 2010)

Hi,
The rate of VAT on Agri Produce and Livestock is 4.8%.  The rate of 5.2% is the flat rate addition payable to unregistered farmers to compensate them for the VAT that they do not recover VAT. 
A Flat rate farmer who sells an animal for €100 will get an extra €5.20 VAT which he is not obliged to pay over to the Collector General.  A registered Farmer gets paid €104.80, €4.80 of which he has to pay over to the Collector General.


----------



## Graham_07 (21 Feb 2010)

Joe_90 said:


> Hi,
> The rate of VAT on Agri Produce and Livestock is 4.8%. The rate of 5.2% is the flat rate addition payable to unregistered farmers to compensate them for the VAT that they do not recover VAT.
> A Flat rate farmer who sells an animal for €100 will get an extra €5.20 VAT which he is not obliged to pay over to the Collector General. A registered Farmer gets paid €104.80, €4.80 of which he has to pay over to the Collector General.


 
Thanks for clarifying that, my head was on one track not the other.


----------

