| 8.5°C Belfast

High VAT rate 'is hampering expansion of industry'

Close

Restaurateur: Bob McCoubrey

Restaurateur: Bob McCoubrey

Restaurateur: Bob McCoubrey

With the Republic keeping VAT at 9% for the tourism industry, one restaurateur has said that Northern Ireland's 20% rate of VAT is stopping his business from expanding.

In the Irish Budget, Finance Minister Michael Noonan announced he would keep the reduction in VAT for the tourism industry in place.

Despite the calls for a cut in Northern Ireland, the Treasury has always ruled out the possibility of a decrease in the rate.

Bob McCoubrey, owner of the Mourne Seafood Bar, which has restaurants both sides of the border, said: "We would love to expand because it's the only way we can keep good people in our company. Through expansion they can see they'll have their own restaurant, or move up into management.

"But we can't expand with VAT at 20%, it just doesn't make sense."

Mr McCoubrey operates two Mourne Seafood restaurants in Dublin and Belfast, as well as Home restaurant in Belfast. The business recently opened a restaurant at Dublin's Charlotte Quay.

He said the quarterly VAT bill "basically cleans out your bank account".

"So you've nothing left to put back into the business, for expansion, staff training, or you've nothing left to increase staff wages because it's all going on tax," he added.

In contrast, at his restaurant in the heart of Dublin he is able to invest further in the business.

"In the Republic of Ireland we pay our VAT and there's money left.

"So the staff get higher wages, which feeds back into the economy, and we can invest in training."

This was backed up by others in the hospitality trade. Janice Gault, chief executive officer of the Northern Ireland Hotels Federation, said businesses in Northern Ireland were operating a "severe competitive disadvantage".

"The reduction of VAT in the Republic of Ireland is continuing to pay dividends for the hospitality and tourism industries there."

She said in Northern Ireland "a VAT cut would bring jobs and growth, while a failure to cut VAT will cost both jobs and growth".

Colin Neill, chief executive of Pubs of Ulster, said a lower rate of VAT would help the hospitality industry "claim a greater share of island-wide tourism and benefit local customers in the region".

This would create around 3,300 more jobs, he said.

"Pubs of Ulster will continue to make calls for a reduction in the rate so that we can compete on a level footing."

Belfast Telegraph