Thousands of cafes and restaurants that turned to takeaway to survive the lockdown are not entitled to the full benefit from the 9pc reduced Vat rate introduced to help the sector o
n November 1.
Hospitality businesses are being warned by Revenue that the Vat reduction announced in the Budget doesn’t apply across the board and many products still attract the higher 13.5pc rate, in some cases only when eaten off the premises.
Baked goods – core products for cafes – have been kept at 13.5pc, while coffee and tea are on the “second reduced rate” of 9pc. While desserts would be charged just 9pc as part of a sit-down meal, under lockdown rules the Vat is 13.5pc or 21pc when bought as a takeaway item.