‘We can’t allow restaurants go to the wall’

REPRESENTATIVES of the restaurant sector yesterday met with Enterprise Minister Simon Coveney to address concerns over the large numbers of establishments in the sector going out of business.

The Government is working on a number of policies to alleviate pressure on the sector, including extending the deadline for repayment of Covid-19 schemes.

Mr Coveney met with representatives from the Restaurants Association of Ireland (RAI) yesterday where so-called ‘debt warehousing’ was raised. This allowed businesses who experienced cashflow and trading difficulties during the pandemic to defer tax liabilities until they were in a position to pay them.

Many of these debts are due to be repaid in May, but meeting that deadline would force many businesses under, industry sources said. ‘It’s screaming out at the Government to extend it rather than let viable businesses go to the wall that are capable of repaying what they owe over a longer period,’ the source said.

Mr Coveney told the meeting that his department would work on several potential policies. Government sources suggested last night that an extension to debt warehousing payments could be for an additional two years. There is an acceptance within Government circles that ‘too much’ was asked of the restaurant sector in a short period of time, with businesses facing increases in the minimum wage, pension auto enrolment, extended sick leave and increased PRSI.

Chief executive of the RAI, Adrian Cummins, told the Irish Daily Mail that there is an ‘acknowledgement’ by the Government that they tried to implement too much policy at once. The RAI has said that over 280 food-led businesses have closed down in the past six months.

The key concern of the restaurant industry, however, remains the reversal of the special temporary reduction in the hospitality VAT rate from 13.5% to 9%, which ended in September last year.

Mr Cummins said that his organisation will campaign to separate the restaurant sector from the rest of the hospitality sector. However, Minister for Public Expenditure Paschal Donohoe told RTÉ Radio 1 yesterday that he did not expect the Government to make significant budgetary changes agreed in January.