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Restaurants seek fresh VAT cut to combat hard-Brexit

Restaurants seek fresh VAT cut to combat hard-Brexit

Restaurants here want the Government to reduce the VAT rate for the hospitality sector to 9% once again, ahead of a potential no-deal Brexit.

The organisation has warned that one in five restaurants here is likely to close if the UK leaves the EU without a deal.

It says reducing the VAT rate is necessary if those businesses, which collectively employ 175,000 people, are to remain open.

“The Restaurant, Tourism & Hospitality VAT increase has put a huge strain on our members,” said Adrian Cummins, CEO of the Restaurants Association.

“Small businesses are struggling to cope with the huge increase in the cost of doing business.”

“Around 1 in 5 restaurants in Ireland will close if a hard Brexit goes ahead: the 9% VAT rate is critical to restaurant survival in Ireland.”

In 2011, the Government cut the VAT rate for the restaurant, tourism and hospitality industry from 13.5% to 9% in an effort to grow activity in the sector following the damage caused by the financial crash.

The reduction was, however, abolished last October in Budget 2019.

Official statistics show there has continued to be significant growth in the number of tourists coming to Ireland since the rate was increased.

But according to restaurateurs, figures also show that visitors are staying for less time and spending less money.

Central Statistics Office data shows that trips by residents of Great Britain to Ireland decreased by 1.1% to 311,700 in June, with the reduction in the value of sterling and Brexit uncertainty blamed.

The UK accounts for over a quarter of all overseas tourism revenue in Ireland and almost half of visitors here.

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