Auto Amazon Links: No products found. Blocked by captcha.
Hospitality businesses in Northern Ireland are urging for a reduction in VAT, arguing that the current tax rates hinder their ability to attract visitors from across the border. Operators in the sector are increasingly feeling the strain of rising costs combined with a VAT rate that is considerably higher than that in the Republic of Ireland. They warn this discrepancy puts them at a disadvantage in what is essentially an all-island market.
Tiffany McKay, a cafe owner from Carnlough, shared the tough choices she and others in the industry face amid these challenges. She explained that rising expenses force her to consider adjustments such as reducing portion sizes, preparing fewer items from scratch, trimming opening hours, or even cutting down the number of days the cafe operates during quieter periods. “Each of these decisions is extremely painful,” McKay said, highlighting the difficult balance between managing costs and keeping prices affordable for customers who are themselves struggling with the cost of living.
The difference in VAT rates between Northern Ireland and the Republic of Ireland is a key concern. Currently, the UK charges 20% VAT on hospitality services, compared to 13.5% in Ireland. This gap is set to widen further, with the Republic lowering VAT for food-led hospitality to 9% this summer. Selina Horshi, who owns a hotel in County Londonderry, emphasized the impact this has on competitiveness. She pointed out that potential visitors often consider the final cost, not the tax policies behind it, making Donegal a more attractive option for events such as weddings or tourist stays. Horshi described how this situation often reduces visits to Northern Ireland to mere day trips, with negative consequences for local businesses such as pubs, shops, and taxi services.
Colin Neill, representing Hospitality Ulster, reinforced these concerns by highlighting how many hospitality businesses depend on cross-border domestic trade for weddings, functions, and tourism. Neill warned that the impending 9% rate in the Republic will further undermine Northern Ireland’s appeal. He is advocating for a pilot project to demonstrate to the UK government that lowering VAT regionally could stimulate economic benefits like job creation and increased tax revenue from higher sales. However, the UK Treasury remains cautious, stating that regional reductions in VAT could complicate business operations and reduce funding for essential public services. Meanwhile, the Department of Finance noted that while the Northern Ireland Executive received a substantial budget settlement last year, the authority to alter VAT rates ultimately lies with Westminster, which so far has shown little willingness to act on the issue
Read the full article from The BBC here: Read More
Auto Amazon Links: No products found. Blocked by captcha.