What is the VAT 9 hospitality movement and why is it important?
Across Ireland, businesses are appealing for help to “survive a hospitality disaster”.
Besides the climbing price of pints in Temple Bar and beyond, a regular topic of conversation at dinner tables, online and in squished office kitchens is how expensive its gotten to eat out in Ireland. Businesses are berated for price hikes but on the other side, they’re battling against VAT increases that are impossible for them to absorb themselves.
The VAT increase in question is a jump from 9% to 13.5%, which came into effect on 1 September 2023. The types of goods and services affected include supplies of certain food and beverages in restaurants, cafés and bars; admissions to attractions like cinemas, museums and exhibitions; the provision of hotel, guesthouse and similar accommodation; and hairdressing services.
The temporary 9% VAT rate for these supplies came into effect on 1 November 2020 in response to the challenges faced by businesses as a result of the COVID-19 pandemic and various lockdowns. Its expiry date was extended on a several occasions, but ahead of the increase on 1 September last year, Government indicated that there would be no further extensions beyond this.
The only show in town to support Food Led Businesses is a reduction in the Vat rate to 9%.
— Adrian Cummins (@adriancummins) April 3, 2024
A reduction in employers PRSI will have minimal impact for businesses. It’s a help but it’s about 5k saving on a €1m turnover (20 staff restaurant)
Vat reduction equates to €37k
In the months since the VAT increase, businesses have been vocal about its devastating effects and the challenges Irish hospitality is facing, and we’ve also seen a number of closures. Many of these are well established businesses, some open for over a decade and beloved by the communities they serve. One such business is Storyboard, a stalwart Dublin 8 speciality café which announced its closure in January of this year.
Today, from its previously inactive Instagram account Storyboard has joined a number of hospitality businesses in posting about VAT 9, a movement to get the hospitality VAT rate back down to 9%.
VAT 9 Now describe themselves as “a group of hospitality business owners, lobbying to get the hospitality VAT rate back to 9% to enable businesses to stay open”. A number of businesses are telling their stories online as part of the movement, including Budds in Ballydehob, Shirley’s food truck in Kinsale and Alchemy Café in Cork. The overriding message is clear – Irish hospitality is on its knees, and Government intervention is needed.
“With the recent VAT brought back up to 13.5%, the increase in wages, ingredients and energy the industry is on its knees.
“If Leo Varadkar and Simon Coveney can go….then the 13.5% can follow them too!! We are not closing we are advocating for a reduction in VAT!”, Alchemy Café writes.
A post from Wildflour, a bakery in Innishannon reads:
“People who run small hospitality businesses aren’t in it for the money. Because there is none, there never was for most of us. We do it because we love it. We love to provide for our community and to be apart of that community.
“We pay our suppliers, our staff, our never ending bills and we make it work however we can. But, in recent times small businesses have been drowning. No matter how much product we sell, however big the queues are, no matter how much our community is giving everything to support us it’s becoming impossible to survive this crisis”.
The VAT 9 group are imploring for people to spread the word and contact their local TDs about the challenges facing hospitality businesses right now – you can find out more and read the stories of individual business owners via their Instagram page.
Header images via Instagram/vat9.now
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