By Jonathan McCambridge, PA
A decision to keep a reduced VAT rate of 9 per cent for the hospitality sector until the end of August 2022 will be welcomed by the industry, a publican has said.
Mark Redmond, owner of The Emigrant Bar and Eatery in Athy, Co Kildare, said the trade had been worried that the VAT relief would be ended sooner in the Budget.
He said that traders who have been devastated by the impact of the Covid pandemic need every bit of help available from the Government.
However, some industry bodies were disappointed that Minister for Finance Paschal Donohoe did not extend the 9 per cent rate beyond next summer.
Mr Redmond said: “I opened my restaurant in November 2019, I put a lot of money into it. Increased our staff from an off-licence to a bar to a gastro-pub. When I closed down in March 2020 because of Covid I was devastated.
“We opened up six weeks later and we developed a takeaway business which was very successful. But we need every bit of help from the Government we can get.”
He added: “The VAT is not touched until next year, September 2022. That was a big worry, a big concern, we welcome that.”
“We are reasonably encouraged, we welcome what the Government has done, they seem to be on our side.
“We are looking forward to opening up without restrictions, the Government have recognised our concerns. We were worried about the VAT but they have given us another year on that. So that was a big positive.”
But Adrian Cummins from the Restaurants Association of Ireland (RAI) said it was a “disastrous” budget.
He added: “This budget is a disaster for our members, restaurants, cafes and gastropubs, a vital element of our tourism offering.
“The VAT rate ending and wage supports tapering off will be the nail in the coffin of many hospitality businesses this winter.”
“Although the supports offered in the budget are welcomed, there are still some long hard months ahead.
“Since lockdown measures and restrictions have been put in place, our industry has complied with the rules.
“Public safety and the safety of workers have always been at the top of our agenda. But this has meant serious financial difficulties for many.
“We needed the Government to help us fight for survival, today’s announcements fall short of that and we will need ongoing support to trade out of this.”
The Irish Hotels Federation called on the Government to extend the 9 per cent VAT rate until after 2025 in order to safeguard overseas tourism recovery and competitiveness.
The Licensed Vintners Association (LVA) said Budget 2022 was generally positive for the hospitality sector but warned the VAT increase coming next September will be a serious problem.
“Overall this has been a generally positive Budget for the hospitality sector,” said Donall O’Keeffe, chief executive of the LVA.
“The extension of the rates waiver and the retention of the wage subsidy supports will provide some stability to businesses who have effectively been shuttered for most of the last 18 months and who are still operating with severe constraints in place.
“Looking ahead, we are concerned about the implications of the decision to increase the VAT rate from next September.
“That’s going to have a significant inflationary impact on hospitality costs from next autumn onwards, with the level of VAT charged effectively due to rise by 50 per cent.”