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TÁNAISTE MICHEÁL MARTIN has said he will talk to the Finance Minister about structuring warehoused debt repayments for the hospitality sector following a wave of restaurant closures.
Last week, Cork eatery Nash 19 closed after over 30 years in business, with the loss of some 20 jobs.
Adrian Cummins of the Restaurant Association of Ireland (RAI) said he was “shocked and saddened” at the closure of the “Cork institution”.
He called for the government to take “immediate action” and added: “If a long-standing business like this is closing, what hope for the rest of the sector.”
The RAI has said over 280 food-led businesses have closed down in the past six months and that the industry is “facing a crisis”.
It has released what it has called a “five-point plan to save the food-led hospitality industry”.
This includes reinstating the 9% VAT rate and phased warehoused debt repayments, where businesses are allowed to “pay back what they owe over a 10-year period to avoid a tsunami of liquidations”.
Our industry is currently in crisis.
— Restaurants Association of Ireland (@RAI_ie) January 13, 2024
Each and every day, several independent food-led businesses are being forced to close their doors for good.
The RAI has a plan to help the Government avoid an otherwise inevitable tsunami of restaurant and café closures in 2024. pic.twitter.com/cwDXgkJwr3
Warehousing of tax debt assists businesses who experienced cash-flow and trading difficulties during the Covid-19 pandemic and speaking to reporters in Cork yesterday, Tánaiste Micheál Martin said “that’s certainly something we can look at.”
He also remarked: “I’ll talk to Finance Minister Michael McGrath in respect of that, to see if that can be structured.”
However, he added that it has “already been restructured to some degree in terms of phasing”.
Meanwhile, Martin noted that VAT reductions are “temporary”.
He told reporters: “On VAT, 13.5% was always the VAT rate, it was only during Covid and after the last crash as well, that it’s been temporarily reduced to try and give a kick.”
He also pointed to “problems” with hotels.
“It’s difficult to separate out the restaurants from the hotels,” said Martin.
“That was one of the problems because hotels, when we did bring it down to 9%, a lot of hotels didn’t bring down prices, the prices went up, as we witnessed across many towns and cities if the truth be told.”
Martin added that the government brought in a €250 million package in the budget “as a way of helping businesses generally in the cost of living package to support them”.
“Our objective is to keep businesses open and there was a €250 million allocation made in the cost of living package that accompanied the budget for businesses generally, in terms of grant availability.”
Martin also said that “there has been unprecedented support over the last three years for the hospitality sector, that should be acknowledged”.
“There are undoubtedly difficulties and challenges, particularly because of the most recent inflationary round and that’s without question,” said Martin.
“We will do what we can to help, but I wouldn’t accept any suggestions that we’re not listening, I don’t think that’s valid.”
Martin also said that the government “stepped up to the plate during Covid and provided very substantial resources to the hospitality sector”.
“They are going through a lot of pressure, I think what we’re witnessing is the more long-term effect of Covid.
“Its impact on a whole range of the economy and society has not gone away.”
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Well if people weren’t being fleeced by extortionate rents and massive bills they could probably afford to eat out more.
Couple that with it being almost impossible to find parking anywhere because of the green’s anti car agenda and there’s your reason.
@lWOk0fWf: if you think your paying mental money in rent bills and insurance you should see what a restaurant has to pay
Notwithstanding the energy and inflation costs, perhaps try to address the crippling insurance costs and rates for the industry.
Warehousing debt is just kicking the can down the road.
@Ciaran: isn’t that what our wonderful government is good at, kicking the can down the road
If you can actually get a starter for under a tenner and mains for less than 20 then maybe people would start eating out more! The increase in prices of dishes everywhere has been insane!
@Cormac O’Halloran: Correct but the costs the restaurant have to cover i.e. energy bills, wages, resources, rates, insurances etc are making that impossible. A lot of towns have empty shops for those reasons alone. It’s not viable to start a small business in this country anymore.
@David Corrigan: exactly, the only people who can afford the sky high rents, bills and insurance is chain restaurants/shops which is why there’s so few cafes but costas everywhere
@Pete Murrey: MAGA is alive and well, and living in Dublin!
I know 1 restaurant/bar closing at the end of the month letting go staff to reopening as accommodation for migrants and that’s no joke , we’ll done FFG
@M G: there is always a Let’s blame the migrants one,isn’t there,eh. Good on ya sport !
@M G: Not the migrants fault but a policy failure. If theres more money to be had housing refugees/IPAs, with the minimal overhead that goes with it, why wouldnt savvy business ppl close their hotels (with the job losses & knock on effects on local businesses)?? Business ppl are there to make money in the best way presented to them. It doesnt take a genius to figure out that there will be social & economic problems & kickback when functioning hotels and nursing homes are taken out of the system. Add to that the pressure on already stretched social services in communities – many of which only run by the good will of the local ppl. The lack of planning and foresight is astounding.
If the VAT reduction was as ‘temporary’ as the USC charges we would see less businesses closing.
Granted Inflation, energy, costs are a factor in restaurants being forced to close. Restaurants and pubs were well subsidised by the government during lockdown, yet when pubs and restaurants reopened after two lockdowns they increased prices. On top of that the breweries increased prices also. The reduced Vat rate was never passed on to customers. Pubs and restaurants played a major part in their own downfall.
@Pete Murrey: Don’t think you are in a position to understand anything…How many fake profiles are you using at the moment.? .
@Donal Desmond: Don’t encourage him/her. It’s a troll.
Look at the reviews for Nash19. Their problems seemed more internal than external
@Ian McDonald: The customer is always right
@Ian McDonald: I was a “regular” in Nash19 over many years…… admittedly never heard of any of these ( many) grumblings…… was shocked by so much negatively/ awful reviews. You DO learn something ‘new’ every day
I think the majority of businesses failed to reduce their prices in line with the VAT reduction but they all put their prices up when the 13.5 % rate was reintroduced
Priced themselves out of business , overpriced crap in many incidences.
Only the best will survive this round of readjustment ?
Martin talking nonsense as usual. Nothing to do with COVID whatsoever. IF a restaurant serves good food and IF the prices are reasonable, the only reasons it will fail is because the cost of doing business is too high and or it’s target customers can’t afford to support that restaurant through their custom.
I would be very confident that both these reasons are applicable in most cases and that ffg are steering thie people of this country in a direction where only the chosen elite have the kind of income to allow themselves wine and dine out on a regular basis.
Some restaurants increased their prices when the 9% VAT rate kicked in citing wages and other expenses.
@AnthonyK: IF the VAT was reduced to zero……would the prices on menus really drop at all???? Doubtful
Funny how so many here think the homeless are responsible for their drug addiction and poverty, and just need to pull themselves up by their bootstraps, but also want to give failed business owners tax money for failing.
To paraphrase them: why are we rewarding failure? My restaurant hasn’t closed which means they’re just too lazy. Yeah sure, I might have every advantage, but that’s no excuse for them to take my tax money to make up for their laziness and incompetence.
Etc.
Socialism for the rich, paupers grave for the sick and poor.
Hospitality providers are overtaking farmers as champion whingers.
Peter Murray=Not well lol
Tech companies get tax breaks and don’t create or produce anything of value in Ireland; hiring in people from abroad who often just stay a couple years and then move on, yet restaurants that actually produce something and provide something of value to their community, pay full tax. It’s nonsense.
the vat rate for the Horeca sector (hotel restaurant cafe) has always been around 9%. the Irish vat rate for this sector is too high.
In Holland vat (btw) is 0% for Horeca (hotel restaurant cafe). In belgium; businesses upto 25k turnover per year.Alcoholic drink 12%. Non-alcohol and food 6%. –
https://www.guidea.be/Nieuws/Artikel/Id/783/Welke-btw-tarieven-zijn-er-nu-in-de-horeca
God thumbs, it’s 0% vat for the Horeca in belgium for small businesses up to 25k turnover per year. the other rates i quoted are correct. Holland is avg. 9%
Apologies avg.9% vat (btw) in Holland.
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