Border county restaurants fear impact from VAT increase and ‘Hard Brexit

RESTAURANTS in the border counties will be badly hit if there’s any increase in the 9 per cent VAT rate for tourism, the Restaurants Association of Ireland, CEO, Adrian Cummins has warned. THE Association has launched its economic impact report by Economist, Jim Power which assesses the impact a 1% increase in the VAT rate would have on the sector.

The sector is already facing an uncertain future due to concerns over Brexit and weakening sterling.

The report found that restaurants in general will suffer if visitor numbers from the UK continue to decline due to sterling weakness.

‘Restaurants in the Border counties are particularly vulnerable to sterling weakness as less people will come across the border from Northern Ireland and customers from the South will have a financial incentive to go North of the Border,’ the Association has warned.

Restaurants in rural areas all over the country will suffer if indigenous exporters, which are very important contributors to rural economic activity, come under pressure due to sterling weakness.

Sterling weakness and its consequences will remain a serious threat if a ‘Hard Brexit’ transpires, indigenous Irish exporters will come under significant pressure.

If the Common Travel Area is not preserved, the outlook for the UK tourism market will become very pressurised. This can be noted when comparing the UK tourist figures from January to May 2016 to the same period in 2017 which saw a decrease of 6.8% in UK visitor numbers to Ireland.

If the UK leaves the EU’s Open Skies, air travel between Ireland and the UK could be adversely affected, with negative consequences for tourism and the Restaurant sector.