Budget 2026: Cork restaurant owner welcomes ‘relief’ of Vat cut for hospitality

A Cork restaurant owner has said it is a “relief” to see a reduction in Vat for the hospitality industry in Budget 2026.

The Vat rate is being reduced from 13.5% to 9% after a long campaign by cafes, restaurants and others in the hospitality sector.

The reduction will kick in from July despite a call from the industry for it to take force from January.

Liam Edwards is the owner of the Jim Edwards bar and restaurant in Kinsale, a second-generation family restaurant which has been operating since 1971.

“It’s relief to finally see it in paper. We would have preferred the January 1 but we’re happy the Government has listened to our concerns,” he said.

“It’s a great step in the right direction for our industry.” 

Asked if he would reduce the cost of items served in the business in response to the Vat reduction, he said there were two “major” costs ahead for businesses: a minimum wage increase and pension auto-enrolment.

From January, the minimum wage is to increase by 65 cent to €14.15.

“We’re going to maintain the prices until then,” he said, adding that it is unclear how much auto-enrolment will cost.

“Definitely if we don’t see an increase in food or energy prices, we will reduce our prices.” 

He said the business is very seasonal, with 28 to 30 staff during the summer, falling to around 20 during the winter.

“We’re very dependent on the overseas market and predominantly dependent on the American/USA market.

“With everything else that’s going on at the moment, that’s something that we’re looking at all the time as well because it’s not secure in that market either.

“With everything going on with the cost of doing business, we’re also concerned about our overseas visitors and if they’ll keep coming to Ireland.” He said that in the two years after the Covid-19 pandemic, there was “a massive uptake” in overseas visitors as people made up for lost time during restrictions.

“Since then the business has been good, the season has been good the last 12 months, but we’ve found the winters have gone a lot quieter. When we’re actually dependent on the home market it’s got a lot quieter, we’ve seen Christmas get a bit quieter even though we’re not a massive Christmas trade.

“So we really are dependent on most of our business being done in the summer and trying to survive during the winter months. We really have to get a good summer just to get us through the winter.” 

He said the rising cost of doing business has been “unbearable” and energy costs have not come down.

In the last two to three years wage costs have also gone up 10-15%.

“What the minimum rate does to a place like us, where we’re very labour intensive, is that every time the minimum wage goes up, we feel obliged to give everybody a wage increase, and that’s what we have done in the last two to three years.” 

He said of the 9% Vat rate: “We feel like that’s our survival rate, I think that’s the rate that we can survive. With all the other factors brought in, that is the just rate, that is the rate that should be in Ireland.”