Budget returns VAT to old rate of 21%

The standard Value Added Tax rate for goods and services has been increased from 20 per cent to 21 per cent.

The move reverses a 1 per cent drop in the rate in last year's Budget.

The higher VAT rate applies to a range of goods and services, including mobile phone calls and luxury goods.

Expressing disappointment at the move was the Irish Charities Tax Reform Group, which urged the Minister for Finance to introduce a VAT refund mechanism for charities.

"As the charities sector are unable to recover VAT, this decision will cost the sector several million pounds annually," the group said in a statement.