Small Independent Hospitality Businesses in Ireland Call for Lower VAT Rate

For Keane, the impact is inevitable: smaller, independent operators will be squeezed out, and the presence of large international chains who can soak up costs, will increase. File photograph: Andrew Testa/The New York Times

Talk is cheap; VAT isn’t. In September 2023, this specific VAT rate – reduced during the pandemic – jumped from nine per cent to 13.5 per cent. This encompasses restaurants, cafes, bars, as well as hotels – a blanket rate for a hugely diverse number and size of businesses. It applies whether a hospitality business is part of a billion-euro portfolio, or run by a one-woman-band.

For Keane, the impact is inevitable: smaller, independent operators will be squeezed out, and the presence of large international chains, such as Pret A Manger, who can soak up costs, will increase. “You don’t have a lot of recoverable VAT in a small food business, unlike a bigger business. So you just become a VAT collector for Government. Then you’re forced to put up your prices. But if you keep increasing those, nobody will be going out and buying anything.

I’ll leave the last word to Keane. “I haven’t seen anything to support small businesses since Covid. All we ever see with how Government treats businesses is a lot of ribbon-cutting for FDI corporates. I don’t see initiatives on the ground. I don’t see any action happening fast. People have been screaming about this for months.

Source: Financial Digest (financialdigest.net)

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