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Temporary reduction in VAT for Gas and Electricity - Ireland Only

Created on  | Last modified on 

Summary

On April 13, the Irish Government announced a reduction in the rate of VAT on gas and electricity from 13.5% to 9% to come into effect on 1 May until 1st November 2023.An announcment was made during the 2025 Budget to further extend the reduction until 30th April 2025.

Description

What changed?

To help businesses and households, the Irish Government temporarily reduced the rate of VAT that applies to gas and electricity from the reduced rate of 13.5% to the second reduced rate of 9%. This will revert back to the 13.5% reduced rate from 1st April 2025. Details of the reduction can be found on the Budget website.

Resolution

You can create a new tax code to represent the temporary 9% VAT rate, which makes it easier to identify transactions you're entering during the temporary reduced VAT rate period for reconciliation and analysis purposes.


Create new tax codes

You can create new tax codes for transactions that qualify for the reduced 9% VAT rate as follows.

Sage 200 Standard / Education

  1. Open Settings > Organisational and Financial > VAT Rates.
  2. Click Add.
  3. Enter the following details:

    CodeAn available VAT Code number
    NameThis can be anything which is meaningful to your business
    VAT ReturnThis must be selected
    %Set to 9%
    Input CodeOptional depending on your business setup
    Output CodeOptional depending on your business setup
  4. Click OK.

Sage 200 Professional

  1. Open Accounting System Manager > Settings > VAT Rates.
  2. Click Add.
  3. Enter the following details:

    CodeAn available VAT Code number
    NameThis can be anything which is meaningful to your business
    VAT ReturnThis must be selected
    %Set to 9%
    Input codeOptional depending on your business setup
    Output CodeOptional depending on your business setup
  4. Click OK.

This article provides general rather than specific guidance to assist all of our customers, including both in the United Kingdom and Republic of Ireland. We always do our best to make sure that the information is correct but as it's general guidance, no guarantees can be made concerning its suitability for your particular needs. The information is valid for our general customer base at the time of publishing and is provided without any warranty of any kind, express or implied. You should take professional advice if you require specific guidance on your individual circumstances, for example to ensure that the results obtained from using our software comply with statutory or regulatory requirements. For VAT, customs and excise and duties enquiries you should contact The Revenue. In no event will we be liable to you for any direct, indirect, consequential or incidental loss or damage arising out of or in connection with your use of the information provided.
The VAT or tax codes used in this article are based on the default or recommended codes set up in the software. These may be different in your software.