Sir, – Further to Una Mullally’s excellent article “One VAT rate for all is killing small hospitality businesses” (Opinion & Analysis, April 8th), let me add some details as to why the VAT rate on food needs to be urgently reduced for small businesses.
For our café, the VAT change in September 2023 increased our annual costs by €20,000, and the wage increase in January by a further €20,000, increasing our cost base in total by 16 per cent.
Minister for Finance Michael McGrath has indicated that there will be no mini-budget but there could a €70 million support package built around employer PRSI.
This might give us back €1,000 in 2024, when our employer PRSI is costing us €23,000 per annum.
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Small businesses urgently need help and rather than wait for the autumn budget, why not focus the reduction in food VAT on those that paid less then €100,000 on VAT in 2023, or some such number? This should produce a minimum impact on the Department of Finance’s budget constraints mid-year.
Where is the macro-understanding of what is happening to small businesses? – Yours, etc,
DEREK BENNETT,
Harry’s Café Bar,
Dún Laoghaire,
Co Dublin.
Sir, – Una Mullally’s article outlines the challenges facing small businesses, particularly those in hospitality.
My recent experience in an independent bakery and coffee shop while travelling through Connemara gave me some cause to wonder on the merits of recent calls for a VAT reduction.
On ordering coffee, I was told that as I didn’t have a “keep cup”, I would have to pay a €1 charge per cup on top of the price advertised for coffee. The charge, I was told, would go toward the cost of the paper cup and a “donation” to an environmental charity. No breakdown of cup cost versus the amount donated to charity was given.
I was asked if I was happy paying the charge. I wasn’t and took my business to the large multiple store across the road which sold me good coffee at a fair price.
I would prefer to support local businesses and have no issue with a disposal cup levy if introduced by the Government. However, I draw the line at what I would regard as price gouging. To me, such behaviour undermines the calls being made by others in the same sector for a reduction in VAT as any business prepared to turn away custom has little need of a cut in their VAT. – Yours, etc,
PAUL McDERMOTT,
Roscommon,
Co Roscommon.