Belfast Telegraph

Tuesday 24 May 2016

Restaurant call for lower VAT rate is food for thought

By Margaret Canning

Published 24/07/2014

Mourne Seafood Bar, which has restaurants in Dundrum in Co Down, in Belfast and in Dublin, is uniquely placed to observe the difference between running a hospitality business in the north and in the south.

Owner Bob McCoubrey is vocal about the impact the Republic's tourist-friendly Vat rate of 9% has had on their latest venture, in Dublin's Charlotte Quay.

The Republic's rate for tourism-related businesses was slashed to 9% from 13.5% in 2011, giving long-suffering restaurants and pubs some much-needed breathing space.

But here in Northern Ireland and the UK, Vat remains a universal 20% across all sectors and services.

The Finance Minister admits that he would like to see Vat on tourism services and companies cut. But he points out that the Treasury will not allow us to do so, on the basis that any cut in Vat would have to apply across the board.

The Vat position reinforces our lack of autonomy when it comes to doing business –struggling to compete with the Republic on areas like tax where it can be more flexible.

The campaign to cut tax on tourism companies and services has never really caught on, and never gained the critical mass of the fight to have corporation tax powers devolved. It is an area ripe for discussion, and could help us reverse the disastrous slide in visitor numbers from the Republic.

Meanwhile, Tourism Ireland has launched a tartan offensive to educate those visiting the Commonwealth Games about the delights of Northern Ireland. Let's hope they can be tempted to visit us.

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