Struggling pub owners are calling for a temporary VAT reduction until Christmas
Protect our pubs.
That’s the message from the drinks industry today, as The Licensed Vintners Association (LVA), the Vintners Federation of Ireland (VFI), and Drinks Ireland demand a temporary reduction in the hospitality VAT rate and an extension across alcohol sales in the on-trade (pubs and bars), until December 31st, 2020.
“We were among the first sectors to close on 15 March. We are among the last to reopen with many pubs still not permitted to reopen until 20 July,” said Donall O’Keeffe, CEO, LVA.
“We will do so under very unique circumstances, completely at odds with what it means to enjoy our culture and heritage in the pub. We have had to completely change our business model and the VAT model should change to reflect our new reality. Government guidelines mean we will operate at 50% capacity or less, yet our VAT burden currently remains the same – this is inequitable and should change, similar to measures taken on VAT in other EU countries.”
Mr O’Keeffe highlighted that Ireland’s VAT rate on alcohol is significantly higher than EU averages.
“It is our strong view that a temporary reduction and extension of the hospitality VAT rate to alcohol sales in the on-trade, until 31 December 2020 should be implemented,” he added.
“This will provide tangible support and show solidarity with this industry. This is about businesses surviving.”
Together, the group represent over 5,000 pubs – businesses that employ over 50,000 people, right across the country – as well as drinks manufacturers and suppliers in Ireland. The group wrote to all TDs outlining the need for support with regard VAT last week.