Vat Refund & Reclaim Info

VAT Rate Drops After Bungle By Government

The Irish Government dropped the VAT rate back to 21% in the last budget.  The VAT rate had been increased by .5% over a year ago in order to raise more tax to make up for the awful mismanagement of the Irish economy.

It made no real difference to the amount of money collected and was also blamed by the local shop as one of the reason why shoppers were heading north to shop and not spending their money in the South.  A difference of 6.5% in the rates of VAT between the South and the North of Ireland is quite a jump.

Without all of the other differences that abound just by being on one side of the border would save you €6.5 every time you spent €100.  Not much of  difference, and not enough to make people drive two hours and pay for the fuel.

If your company was aiming for the export market like PJ Bonor - the VAT rate made no diference at all - and the export market is the market we do need to target.

But there was always a big price difference between the North and South.  I have driven to Belfast to shop before Ikea was opened in Dublin and that highlights the main problem.  The economy of scale was not allowed to thrive in the South, planning laws stopped supermarkets and other large retailers opening stores in the South the same size as the North.  I would still drive North to shop as I can have a lot more choice.

Irish businesses have also suffered from a much higher property value for their premises - well we have all seen what happened with that during the last 18 months.

The minimum wage in the South is €8.65 - in the North is it about £5 - big difference.  Most things are more expensive in the South, many of the larger supermarkets tried to convince the public last year that there was little difference between the two with some advertising campaigns - that didn’t work very well and more than likely hurt their credibility.

The differences in the VAT rate has now narrowed to 4% again something by itself will make little difference to shoppers in the south or the North - there are too many other factors to take into account.