What the latest VAT measures mean for hospitality, charities and farming

VAT for hospitality

The 9% rate has done what it was meant to do, and the Government should say so. Since July, food-led hospitality has had the breathing space it asked for, with no sunset clause. But at a cost of about €681 million a year, the relief should be measured against what it was for – jobs and prices, rather than margins. On the evidence available so far, the insolvency figures suggest it is working and keeping business open.

Two questions follow. The first is accommodation, which stays at 13.5% while the food served in the same hotel is at 9%, and the apportionment that creates is a compliance cost of its own. The second is who else is still on 13.5% and asking why, now that hairdressers have the cut.

At about €681 million a year, the relief should be measured against what it was for, jobs and prices rather than margins. On the evidence so far it is keeping businesses open, and that needs to be shown rather than assumed.

VAT on Charities and Flat Rate Farmers

This increase will allow flat rate farmers full compensation on their VAT input costs. Additionally, the VAT rate has been reduced on livestock respiratory vaccines to 9%, down from 23%. Focusing on charities, the Government has increased the VAT Compensation Scheme annual capped fund to €15 million, up from €10 million. The scheme aims to supports charities by reducing their VAT burden and allowing for partial compensation of VAT incurred.