VAT rate change

As part of the Government’s July Jobs Stimulus, the standard VAT rate of 23% will be temporarily reduced to 21%. This will come into effect from the 1st September 2020 and stay in place until the end of February 2021.

The Revenue have a guide on how businesses should deal with VAT rate changes, which you can find here. One thing to highlight from the guide is if you are sending an invoice to a VAT registered business the VAT rate that should be applied is the rate in force at the time of issue of the invoice. If you are sending an invoice to a non-VAT registered person the VAT rate applied on the invoice will be based on the date the goods or services were supplied, not the date of the invoice.
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From an accounting point of view most systems should be able to deal with a new rate of VAT. I would suggest adding a new VAT rate as you will need to revert to the 23% from the 1st March 2021. For businesses who pay VAT on a receipts basis you will need to make sure your systems are tracing the VAT back to the invoice and not the date of the lodgement.