A recent article in the Irish Times spurred a lot of discussion today. The VAT rate will be returning to 13.5% which was the original pre recession rate. The vat rate came down to 9% and ensured that the industry kept moving during the recession. If memory serves me correctly, it was rolled out under Leo Varadkar.
Now that the economy appears to be thriving and average spends across the hospitality industries are up, the Revenue Commissioner has decided to return the VAT rate to its original percentage. What bugs me here is that many wedding suppliers, mainly venues did not reduce price in line with reduction yet some are choosing to increase their prices. To be fair, smaller, sole traders just cant sustain the increase.
So, you are probably reading this because you are trying to figure out how this effects you and your budget.
Here’s what I know:
- The inc in VAT can’t be chargeable until implementation in 2019. This means that if you pay in advance of 2019 then you will be at the same 9% rate. If you pay your bill in 2019, it will be subject to 13.5%.
- Many wedding suppliers and venues that I’ve seen have committed to not rolling it out to anyone that is already booked in for their 2019/2020 weddings. I applaud these suppliers.
- If they are bringing in the increase – check the maths! Some may add on 4.5% of the current total price. They need to strip out the 9% to the base rate and calculate the vat on the gross price e.g.
If your venue bill is €10,000 (non alcohol charges) with 9% included = €900 is vat meaning gross is €9,100 is pre vat fee.
Your 13.5% should be on the €9,100 (€1229) = €10,329
€10,000 plus 4.5% = (€450) = €10450
It’s the difference is €121 but that could buy you something nice on honeymoon! Watch this across the board on your wedding bill!
You need to bear in mind that alcohol is still at 23% and that your total bill will need to strip out the drinks costs as the 9% is accommodation, room hire, services, non-alcoholic drinks, food etc
Some of you on social media have asked my opinion on what they should do if they are not happy to pay the increase….well firstly, check if your contract specifies prices are subject to VAT increases. If not, you should have some discussion to say that you don’t agree to the roll out and the prices you booked should be honoured. Other than that, if you aren’t happy, you need to discuss with your supplier and see their view point as the viability of their business could be compromised if they can’t sustain a 4.5% increase. Or if you are still not happy, there are so many suppliers after posting on my instagram offering no price increases, maybe its time to chat to them if price is a major factor. If you try and get out of contract, it may equate to more than the vat increase.
Best of luck!
Comments are closed