We get it — VAT registration isn’t exciting. But ignoring it? That can cost you. With the 2025 VAT threshold changes now in full effect, we’re seeing more businesses either registering too late — or not registering at all. And when that happens, penalties can snowball quickly.
If your business is growing, or if you offer both goods and services, it’s time to stop guessing and get clear. Below are three common VAT traps we see businesses fall into, even with the best intentions.
1. The New Thresholds Seem Simple — But Aren’t
In January 2025, Ireland increased the VAT registration thresholds:
- €42,500– Services only
- €85,000 – Goods only
- €85,000 (combined) – If at least 90% of turnover comes from goods
The confusion? Most businesses don’t fall cleanly into one category. If you install, repair, customise, or package products, you might be mixing goods and services without realising it — and that affects which threshold applies.
Tip: If you’re unsure how your revenue breaks down, get a VAT threshold assessment done. It’s better to be cautious than caught off guard.
2. It’s Based on a Rolling 12 Months — Not the Calendar Year
This one catches a lot of people out: your VAT registration obligation is based on a rolling 12-month turnover, not January-to-December. That means you could hit the threshold in June, October, or any time during the year — and you have just 30 days to register once you do.
Pro Tip: Set up an automatic flag in your account’s software when you’re within €5K of the threshold. Staying proactive can save you serious money (and stress).
3. If You Register Late, You Might Owe VAT Retroactively
Yes — if you miss your registration date, Revenue can backdate your liability.
That means paying VAT on past sales — even if you didn’t charge VAT at the time. So unless you want to foot the bill yourself, it’s crucial to stay ahead of your numbers.
Tip: If you’re nearing the threshold, register early. You can choose when to start charging VAT — but you can’t un-cross the line once you’re over it.
Stay Compliant, Stay Confident
VAT registration doesn’t have to be complicated. But it does require good systems and timely decisions. If you’re unsure where you stand, let us help you assess your position and take action — before Revenue does.
Ready for a Quick VAT Check?
Let’s make sure you’re on the right side of the new VAT rules.
Call us now or Contact Us Here for a no-obligation compliance review.
Need help with VAT registration or thresholds?
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