VAT and TBESS extensions welcome but challenges remain

The extension of the hospitality 9% VAT rate for a further six months and changes to Temporary Business Energy Support Scheme (TBESS), making it easier for more publicans to qualify, have been welcomed by the Vintners Federation of Ireland (VFI). The Federation says the announcements will help ease the financial burden on its members over the coming months but that once supports are removed pubs will face an uncertain future.

Paul Clancy, VFI Chief Executive, says: “The Government’s decision to maintain the hospitality VAT rate at 9% for a further six months is welcome news at a time when the cost of doing business is having a severe impact on our members serving food. The Minister for Finance has quite rightly recognised that any increase in the VAT rate would increase inflation at the worst possible time.

“The coming six months are vital for the pub trade, with the St Patrick’s weekend seen as the traditional start of the tourist season and on into summer, so maintaining the 9% VAT rate will assist those businesses serving food and bring an element of confidence.

“However, we are in a situation where the problems an increase in VAT will bring, namely pub closures and job losses, will re-emerge later this year once the extension lapses. Our message to Government will remain the same – the hospitality sector needs VAT at 9% until 2026 when tourist numbers are expected to return to pre-pandemic levels.”

The VFI Chief Executive says the expansion of the Temporary Business Energy Support Scheme (TBESS) is welcome.

“Since TBESS was announced during Budget 2023 the VFI has lobbied on behalf of the significant number of our members who were omitted from the scheme because they are not connected to the natural gas network, so the announcement that pubs using LPG and kerosene can now apply is a big boost for businesses facing massive energy costs.

“We recognise that Government is offering considerable support to our sector at this time but the external pressures on our members is unprecedented and will continue for the foreseeable future,” concludes Paul Clancy.

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