The main new measure outlined in the Finance Bill 2019 is the application of the 13.5% VAT rate to food supplements used for human oral consumption. There had been a long standing concession in place applying the zero rate of VAT to certain vitamin, mineral, and fish oil products. Following a public consultation process ran earlier this year, together with consultation between Revenue and other industry bodies, the VAT rate applying to such food supplements has been given a legislative basis at the reduced rate of 13.5%.
Certain products will continue to benefit from the VAT zero-rate. These products include:
This will apply with effect from 1 January 2020.
The Finance Bill also legislates for the change announced on Budget Day to the limited VAT deductibility (20%) on the hire/purchase of certain qualifying passenger vehicles. The CO2 emission threshold to avail of this deduction will drop to below 140g/km (previously 156g/km) for all vehicles registered on or after 1 January 2021.
The Finance Bill confirms the various measures announced on Budget Day, most notably:
Another key environmental feature within the Budget referred to the new regime to apply in respect of Benefit-in-Kind (‘BIK’) on vehicles provided to employees by their employers. These changes implement a new ‘greener’ focus within the BIK regime, the key elements of which are as follows:
Return to Budget 2020 Analysis.
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