Last Friday the Irish government cut the VAT rate from 13.5 per cent to 9 per cent for the restaurant sector to help it recover from the effects of the recession and boost economic recovery.
Adrian Cummins, chief executive of the Restaurants Association of Ireland welcomed the move, claiming it would make Ireland more competitive in business, attract more tourists to the country and help create more jobs.
Odd one out
BBPA chief executive Brigid Simmonds used the move to press for the same change in the UK. She said Ireland was the latest ‘in a long line of EU countries’ to cut VAT on food in the hospitality sector and said the UK was starting to look like ‘the odd one out’.
“In France, they introduced a reduced rate of VAT in January 2009 for restaurant food and hotel accommodation. This created 29,500 jobs in the first year alone – making the hospitality sector in France a key driver of jobs," she said.
“Cutting VAT could create thousands of jobs in British pubs, bars and restaurants, boosting tax revenues, and helping out consumers. It’s time for the UK to catch up.”
Irish restaurateurs currently pay the highest catering wages and the highest excise duty on wines in Europe.
The new VAT rate will remain in effect until December 2012 but will be reviewed in the 2013 Budget.
Cummins said: "This is the first step in the road to recovery in the restaurant sector in Ireland and we will continue to advocate for the abolition of the Joint Labour Committees and Sunday Premium Payments."