Today’s introduction of the Republic of Ireland’s new 9% VAT rate for food businesses is a significant moment for hospitality across the island of Ireland, writes Michael Henderson, CEO, Northern Ireland Food to Go Association
It demonstrates what can be achieved when government recognises the value of a sector that employs thousands of people, supports local communities and plays a vital role in the wider economy
While we welcome this positive move for our counterparts in the Republic, it inevitably sharpens the focus on the challenges facing businesses here in Northern Ireland.
Our independent cafés, takeaways, sandwich shops, coffee shops and food-to-go operators continue to battle unprecedented cost pressures. Rising wages, National Insurance contributions, energy costs, insurance premiums, food inflation and reduced consumer spending are placing enormous strain on businesses that are already operating on extremely tight margins.
For many operators, particularly those located in border communities, today’s VAT reduction creates an even greater competitive imbalance. Customers already have greater choice than ever before, and differences in taxation inevitably influence where people choose to spend their money. Businesses in towns such as Newry, Strabane, Enniskillen and other border locations are competing every day with operators just a few miles away who are now benefiting from a significantly lower VAT rate.
This is no longer simply a taxation issue. It is about competitiveness, protecting local jobs and ensuring independent businesses can continue to invest in their staff, their premises and the communities they serve.
The Northern Ireland Food to Go Association has consistently called for the UK Government to introduce a 10% hospitality VAT pilot for Northern Ireland. Our unique trading environment, our land border with the Republic and the particular pressures facing our sector make Northern Ireland the logical place to test such a policy.
A VAT reduction is not a silver bullet. Businesses still face a wide range of challenges. However, it would provide meaningful breathing space, improve confidence, encourage investment and help safeguard thousands of jobs across our high streets, towns and villages.
The Irish Government has recognised that hospitality deserves support because of its contribution to local economies and employment. Today’s announcement should serve as a timely reminder that Northern Ireland’s food-to-go sector deserves that same recognition.
We will continue working with elected representatives and the Treasury to make the case for a Northern Ireland VAT pilot. Our members are not asking for special treatment. They are asking for a fair opportunity to compete, grow and continue serving the communities that rely on them every single day.
Now is the time to match ambition with action.
