In July 2020, as part of the Jobs Stimulus Plan, the Irish government announced a temporary reduction in the standard rate of Value Added Tax (VAT) from 23% to 21% with effect from 1st September 2020 to 20th February 2021.
We are passing on the full VAT rate drop to all of our customers. Because of the temporary nature of this VAT reduction and in an effort to be as transparent as possible we have decided to maintain all existing standard and promotion pricing. The VAT reduction will then be applied at the end of your transaction as an additional discount.
How is the VAT drop calculated?
VAT is calculated on the Net amount of an item. For example if an item’s net amount is €100 and the standard VAT rate applicable is 23% then the gross amount would be €123 or put another way it is the net amount multiplied by 1 + VAT percentage. All of our retail prices online and instore are the Gross amount inclusive of VAT.
To move from 23% VAT to 21% VAT you can take the retail display (gross) price and divide by 1.23 (1 + standard VAT percentage 23% ) and then multiply that Net amount by 1.21, being the reduced standard VAT rate of 21%. The net discount on the retail (gross) price is 1.626%.
Does it apply to all goods?
For us, yes. All of the goods we sell are rated at the standard rate of VAT (23% and temporarily 21%) and will receive the full VAT reduction. We will be passing this reduction on in full to all of our customers.
What about promotions and items on offer?
They have no impact on this as VAT is always applied to the Net price of an item sold. As a result you will always see the discount being applied to all items you buy from us, regardless of whether they are on promotion or not.