VAT Rate Changes in Ireland and UK

The VAT rates are changing from today – January 1st 2010 in both Ireland and the UK.
Here in Ireland – the  VAT rate is dropping half a percent to 21%. This drop was announced in the latest Budget and is hoped to help increase retail sales.
The UK dropped VAT in December 2008 by 2.5% – it is now reversing that temporary change and VAT in the UK will rie back to 17.5%.  The difference in VAT between the UK and Ireland has decreased by 3 percentage points – but it is still 3.5% more here in Ireland. The changes in VAT might reduce the incentive for Irish shoppers to go into Northern Ieland to do their shopping .
Online retailers outside Ireland are supposed to charge the Irish rate of VAT on orders delivered here. Amazon – one of the biggest online retailers correctly charges Irish VAT to Irish customers. The changes in UK and Irish VAT mean that all Amazon UK prices will have just an extra 3.5% added at checkout to take account of the VAT differences.