January 21, 2021
News

Kilkenny wedding parties to be hit by hotel VAT rise

THOUSANDS of couples from Kilkenny and across the country who are planning to get married next year will see their wedding costs climb by hundreds of euro as a result of the VAT changes affecting the hospitality sector outlined in the recent budget.

From the beginning of 2019, the hospitality sector will revert to paying VAT at 13.5% after an extended seven-year break on a 9% rate – and wedding parties are likely to be among those hit hardest.

In recent days hotels have started writing to couples with weddings booked for next year and 2020 alerting them to the fact that prices that have previously been agreed will not be honoured on the basis of the 4.5 point VAT increase.

With many hotels charging well in excess of €10,000 for average-sized receptions – excluding the drinks bill – the additional costs to be borne by many couples will be more than €500.

If part or all of a hotel reservation for next year is paid for this year, the 9% VAT rate applies to the portion paid. But if the payment is made next year, then the 13.5% VAT rate will apply.

A spokesman for the Department of Finance confirmed that the higher rate of VAT would be applicable for all weddings taking place from the beginning of next year unless couples had paid for in full before the start of January.

“The Revenue Commissioners has fixed guidelines in relation to accounting for VAT before and after a change in a VAT rate,” the spokesman told The Irish Times.

“The applicable VAT rate is based on when the payment is made as opposed to when the [event] takes place.”

 

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