Laois hospitality sector 'crippled' by VAT 9 charges

In September 2023, the Government increased the hospitality sector’s VAT rate from 9% to 13.5%. 

This increase is now crippling many Laois businesses, with hospitality workers across Ireland signing a petition to reinstate the original rate of 9%.

The Vinters Federation of Ireland, along with the Restaurant Association of Ireland, will march on Leinster House on Tuesday October 15 in protest of the high rate.

One local business in Portlaoise, The Bay Tree café and restaurant, spoke to the Leinster Express/Laois Live on how the current VAT rate is affecting them.

"The increase has almost doubled, in light of wage increases and auto-enrollment, it's very hard to stay afloat," said Mr Anthony Dempsey, owner of The Bay Tree.

"It's not even about turning profit at this stage, its just about staying afloat and open. Wage increases for staff means that in quiet periods you have to evaluate staff levels. We are open the last eight years, and we have seen the VAT almost double. 

"Whether you're a chain or an independent business, we're all in the same boat," Mr Dempsey said.

"Some businesses may have better buying power and brand names to help, but we're all experiencing this same struggle. The VAT could now be the difference in upgrading a piece of equipment, or having another staff member on. It has completely changed how you extend or cut your opening hours," he said.

Mr Dempsey explained that this leads to a knock-on affect to the customer, who only see the rising prices rather than all of the hidden costs behind their food.

"It's understandable, when you don't see what goes into a business behind the scenes. But energy prices haven't dropped back to the original price, electricity and gas prices have almost tripled. This along with wage increases are charges we have to factor," he explained.

"Covid-19 has also thinned out a lot of business. Where people might come out twice a week they're considering if they can come at once a week. A lot of older customers haven't come back and have lost that confidence in themselves. What was once a great social outlet for them is now gone, they're too afraid to go out. It's a social link that has been broken and it's terrible to see," Mr Dempsey finished.

Brian Foley, Communications & Public Affairs Manager at the Vintner's Federation of Ireland (VFI), expressed his frustration with the current VAT rate ahead of today's march.

"This protest is a sign of the frustration of publicans and the wider sector," he said.

"The VAT rate is an absolute disaster for the trade. We have been speaking to Ministers on what the sector needs, and we received great encouragement from them. But when it came to the crunch, nothing was done There is huge anger and frustration here," Mr Foley explained.

Over 1000 participants are expected to march from Mount street to Leinster House, with Ivan Yeats as the MC for the event.

"We want the public to understand that if you're in the hospitality sector, and see busy restaurants and pubs, we're busy fools," Mr Foley said.

"We're turning over money, but there is more money going out than coming in. The prices of everything have rocketed over the last 18 months, it has all inflated through the roof. We are busy fools, don't be fooled by busy pubs and cafes, it really is a precarious business. So many businesses are closing, it's not sustainable," he said.

"There are many business owners who would be here, but they can't afford to take the time off. Today, hospitality is such a tough business, it's not like 30-40 years ago. The VFI haven't marched in over 13 years, this shows the true depth of feeling and the level of this crisis. there is deep worry here that the Government doesn't understand," Mr Foley finished.