The Government has confirmed certain reforms to Revenue’s existing debt warehousing scheme for hospitality industry businesses – whereby monies owed will be subject to 0% interest; can be paid over a period greater than the originally-envisaged 5-year maximum; and won’t require any initial down payments.
Furthermore, companies that have already paid interest of 3% on debt will be refunded.
However, while the industry has welcomed the development, it still strongly feels a return to the 9% VAT rate for hospitality businesses is vital.
Restaurants Association of Ireland CEO, Adrian Cummins, said: “While this news is positive and will, undoubtedly, save many restaurants and cafes around the country from otherwise certain closures, it will not ensure long-term viability for the food-led hospitality industry. As the Minister, himself, previously pointed out, thousands of small, independent food-led businesses hold no warehoused debt but are still struggling each day to keep the doors open.”
Mr Cummins said: “Only the reinstatement of the 9% VAT rate for restaurants, cafes and pubs that serve food will stem the recent tide of closures and secure a sustainable future for our industry.”
“The 50% hike in the VAT rate from 9% to 13.5%, last September, made so many viable restaurants, cafes and other food-led hospitality businesses unviable overnight and a return of the 9% rate for our low-margin, labour-intensive industry needs to be the Minister for Finance’s next move.”
