The VAT limit in Ireland is €42,500, not €85,000

€85,000. That is the number most Irish summaries put at the top of the page, and for a building, plumbing, electrical or tiling business it is the wrong one. The figure that decides whether you have to register is €42,500, and the gap between the two is not a rounding difference — it is €42,500, or roughly a year of work for a one-van operation.

The reason the bigger number is quoted so often is that it exists and is correct, for other people. Revenue's manual on the domestic SME scheme lists both, and the difference is a condition attached to the larger one that almost no trade business meets.

Two figures, and the condition on the bigger one

From 1 January 2025 the thresholds are, in Revenue's own words:

"€42,500 for traders supplying services only; €42,500 for traders supplying goods liable at the reduced or standard rates which they have manufactured or produced from zero rated materials; €85,000 for traders supplying both goods and services where 90% or more of the turnover is from the supplies of goods other than goods referred to above; and €85,000 for traders supplying goods only, other than in circumstances as mentioned above."

Read the third line slowly, because it is the one that gets dropped in summaries. The €85,000 is not available to a business that supplies both goods and services. It is available to one where nine euro in every ten comes from supplying goods. A plumber who fits a boiler is not selling a boiler with fitting attached; the whole thing is a service, and the materials are inputs to it.

Revenue says this directly, in the construction manual

This does not have to be reasoned out from first principles, which is worth knowing because the reasoning is exactly where people talk themselves into the wrong answer. Revenue's Tax and Duty Manual on the VAT treatment of construction services, last reviewed in August 2026, says it twice:

"Taxable persons engaged in construction services are obliged to register for VAT if their annual turnover from the supply of such services exceeds the services threshold."

"Irish resident sub-contractors who supply construction services in the state must register for VAT if the services threshold is exceeded."

The same manual lists what counts as construction services at the reduced rate: "construction work generally; renovation and demolition of buildings; maintenance and repair of buildings; the installation of plumbing, heating and electrical services; and the supply and installation, maintenance and repair of fixtures". Installation and supply-and-install are in that list. They are services, and the €42,500 applies.

Revenue's SME manual even runs the example in a trade: "A plumber, established in Ireland, supplies plumbing services locally worth €30,000 annually. His supplies will be covered by the domestic SME scheme as his annual turnover is under the VAT threshold." Thirty thousand, not sixty — because the plumber is measured against €42,500.

The test looks at two calendar years, not one

"To qualify for VAT exemption under the domestic SME scheme, the annual turnover of a trader must not exceed the applicable threshold in the current and previous calendar years."

So a business that went over in 2025 is outside the scheme in 2026 even if 2026 is quieter. One busy year has a two-year consequence, and that is deliberate — the scheme is for businesses that are consistently small, not for businesses that average small.

The turnover counted is the value of supplies excluding VAT over a calendar year. Revenue's manual also takes one thing out of the count that catches people at exactly the wrong moment: the disposal of a capital asset — "a tangible capital asset such as a computer, or a machine, used by the trader to carry out their economic activity" — "is not included in the calculation of the annual turnover". Selling the old van does not push you over.

You are registered from the transaction, not from the quarter

This is the sentence that turns a threshold into a date, and it is stricter than most people assume:

"Traders are obliged to register from the moment their turnover exceeds the relevant VAT registration threshold. A trader is regarded as an accountable person immediately on completing a transaction that exceeds the threshold and must apply for VAT registration."

Revenue's worked example is a trader with €84,000 of sales by 30 September who then makes a sale worth €1,500: registration is required "from the date of the €1,500 transaction". Not from the end of that VAT period, and not from the following January.

Which means the job that takes you over is itself inside the net. If it was quoted without VAT, the VAT is inside the price you agreed, and it comes out of your margin. The two rates that matter here are the reduced rate of 13.5 per cent, which covers construction services generally, and the standard rate of 23 per cent — but which one applies to a given job is a separate question with its own trap, set out in 13.5 or 23 per cent? The two-thirds rule decides Irish jobs.

And the reverse move is prohibited outright. Section 115(2) of the Value-Added Tax Consolidation Act 2010: "A person who is not a registered person and who, on or after 1 November 1972, issues an invoice in which an amount of tax is stated shall be liable to a penalty of €4,000." Quoting "plus VAT" before you have a VAT number is not preparation, it is a penalty waiting for a document.

The principal contractor with no threshold at all

One group of trade businesses does not get to have this conversation.

"Principal contractors required to operate RCT, who receive construction services from a subcontractor, must register and account for VAT irrespective of their turnover. This applies to both resident and non-resident principal contractors."

Engage one subcontractor on a relevant contract and you are registered, whatever your turnover is. A €30,000-a-year builder who puts one electrician on a job has moved himself into VAT registration by that act — and into issuing the documents that go with it, which for the subcontractor's side look like RCT invoice: the document that shows neither the VAT nor what you will be paid. What happens to the VAT on that subcontractor's supply once you are the principal is in VAT reverse charge in construction: the invoice with no VAT on it.

Two tiling businesses, €61,000 each, €2,604.85 apart

Same trade, same county, same turnover for 2026. Both read the same summary page and both saw €85,000.

Kavanagh Tiling supplies and fits for householders. Turnover in 2025 was €36,000, so it entered 2026 inside the scheme. By 8 June 2026 it had invoiced €39,100. On 9 June it completed a bathroom floor and walls for €3,500, taking the year to €42,600.

That transaction exceeded €42,500, so Kavanagh became an accountable person on 9 June. Turnover from that job to 31 December came to €21,900, all of it quoted without VAT because nobody had noticed. At the 13.5 per cent reduced rate the VAT sits inside those prices: €21,900 × 13.5 ÷ 113.5 = €2,604.85, payable out of margin the customers have already been charged for.

Nolan Tile & Stone has the same €61,000, but €56,100 of it is tiles sold over the counter and €4,900 is occasional fitting. Ninety-two per cent of turnover is supplies of goods, so the €85,000 threshold applies and the previous year was under it too. Nolan owes nothing and registers nothing.

Two businesses with the same name on the door and the same figure at the bottom of the year. The €2,604.85 was decided by the mix — and the mix is a fact about the business that can be worked out on one afternoon in January, long before it turns into a liability in June.

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Position as at 24 September 2026, checked against Revenue's Tax and Duty Manual on the domestic layer of the EU VAT SME Scheme (created August 2025) and on the VAT treatment of construction services (last reviewed August 2026). This describes the rules and is not tax advice. The €42,500 and €85,000 figures were set by Finance Act 2024 with effect from 1 January 2025; thresholds of this kind move in a Budget, so the place to check before the first quote of a new year is revenue.ie's own thresholds page rather than a summary written in a previous one.

What Zirko does here: a business below the threshold is set that way once, and its documents then go out with no VAT line at all — which is the treatment Ireland requires, since below the threshold you are not an accountable person and stating tax is the thing section 115(2) penalises. Zirko prints no small-business note on an Irish document, because Ireland prescribes none, unlike seven of the countries it operates in. What Zirko does not do: it does not add your turnover up against €42,500 or €85,000 and will not tell you which threshold your business falls under. That depends on the goods-to-services mix across a whole year and on the previous year as well — a judgement about your business, not a total the software can read off.