Restaurants face ‘closure ahead of no-deal Brexit’

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While Wicklow seems to be going through a boom in restaurants and eateries, with more and more opening all the time, the Restaurants Association of Ireland (RAI) has warned that they face an uncertain future if a no-deal Brexit happens.

RAI are calling Tourism Minister Shane Ross to protect the restaurant and tourism industry ahead of Budget 2020, calling for a reduction in the rate as they fear the impact on their members of what looks increasingly likely to be a no-deal Brexit.

More than 7,000 people work in the hospitality sector in Wicklow alone. The restaurant VAT rate was reduced in 2011 from 13.5% to 9% to help encourage and support the growth of small businesses.

It was due to expire in 2013, but successive governments deemed the lower rate such a success that it was retained until Budget 2019.

one-in-five restaurants in Ireland will close if a hard Brexit goes ahead

“The Restaurant, Tourism and Hospitality VAT increase has put a huge strain on our members: small businesses are struggling to cope with the huge increase in the cost of doing business,” Adrian Cummins, CEO of the Restaurants Association says.

“Around one-in-five restaurants in Ireland will close if a hard Brexit goes ahead: the 9% VAT rate is critical to restaurant survival in Ireland.

“Minister Ross must listen to the industry and defend the Tourism & Hospitality Industry in Ireland.

“Given the potential for long term and far reaching consequences from a no-deal Brexit, the government must act now to ensure the viability of the sector post Brexit.”

Raising the VAT rate to 13.5% has undermined the competitiveness and viability of Irish businesses, and at a time when other rising costs, such as insurance and commercial rates are only going up, it makes it harder for business to stay afloat, the RAI claim.

The RAI also fears that if the restaurant VAT rate is not reversed ahead of a no-deal Brexit, it will only worsen the divide between urban and rural tourism and continue to put businesses at risk.

According to the CSO, the Accommodation and Food Services sector employs almost 8% of people in the country and contributes over €2.2 billion to the economy.

While there has been significant growth in the number of tourists visiting Ireland, figures for 2019 show that visitors are staying for less time and spending less money. A breakdown of visitor figures shows that the UK accounts for over a quarter of all overseas tourism revenue and almost half of visitors to Ireland, further compounding worries about a hard Brexit.

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