---
title: VAT Rate Changes
description: "**As part of the July Stimulus Package the Minister for Finance has announced a temporary reduction in the standard rate of VAT for a six month period. On 1 September 2020, the standard rate of VAT will change from 23%…"
url: "https://bigredcloud.com/en/documents/vat-rate-changes/"
updated: "2022-11-10"
category: VAT
---

# VAT Rate Changes

**As part of the July Stimulus Package the Minister for Finance has announced a temporary reduction in the standard rate of VAT for a six month period. On 1 September 2020, the standard rate of VAT will change from 23% to 21%. The rate is due to revert to 23% with effect from 1 March 2021.**

For most transactions between VAT registered traders, it will be “cash neutral”; however, there are a number of administrative issues to take into account.

**Invoices**

- On or after 1 September 2020 VAT invoices issued by a VAT registered person (who is not on the cash receipts basis) to a VAT registered person, a public body or a business carrying on a VAT exempt activity should show VAT at the new 21% rate. This is so even if the goods or services were supplied before this date.
- A trader on the cash receipts basis who is required to issue a VAT invoice to another VAT registered person should show the VAT rate which applies on the date of the supply, not on the date of receipt of payment.
- Goods or services which are actually supplied to consumers prior to 1 September 2020 are taxable at the 23% rate even though they may be invoiced after 1 September 2020.

To implement these changes in Big Red Cloud – Firstly add a VAT Rate of 21%

Go To Setup – VAT Rates

![](http://bigredcloud.com/wp-content/uploads/2021/08/capture20200826141033063.png)

and say yes to making the change.

![](http://bigredcloud.com/wp-content/uploads/2021/08/capture20200826141045383.png)

Once on the next screen, add the new VAT Rate:

![](http://bigredcloud.com/wp-content/uploads/2021/08/capture20200826141112262.png)

Set it as default if you wish, and Save

Next, go to Utilities – Edit Product VAT Rates

![](http://bigredcloud.com/wp-content/uploads/2021/08/capture20200826142048903.png)

Set the existing rate to 23% and new rate to 21%

![](http://bigredcloud.com/wp-content/uploads/2021/08/capture20200826141213834.png)

Click on Update, and then click on OK when done.

![](http://bigredcloud.com/wp-content/uploads/2021/08/capture20200826141222226-1.png)

 

## VAT Rate Changes For Recurring Invoicing:

Go To Books – Recurring Invoicing

![](http://bigredcloud.com/wp-content/uploads/2021/08/capture20200826143552594.png)

On the bottom of the screen, choose Utilities and then click on Edit VAT Rates

![](http://bigredcloud.com/wp-content/uploads/2021/08/capture20200826143611608.png)

Set the existing rate to 23% and new rate to 21%

![](http://bigredcloud.com/wp-content/uploads/2021/08/capture20200826141213834-1.png)

Click on Update, and then click on OK when done.

![](http://bigredcloud.com/wp-content/uploads/2021/08/capture20200826141222226-2.png)