9% VAT Ends Today
The concessionary VAT rate of 9% on hospitality services ends today (31st August 2023) when the rate applicable to these services returns to 13.5%.
Unlike the run-up to previous deadlines, there has been no concerted campaign to extend the 9% rate on this occasion. Indeed, hotelier Michael Vaughan from Lahinch, Co. Clare, former president of the Irish Hotels Federation, has placed an advertisement in a national newspaper thanking the Irish Government and taxpayers for their support of the hospitality industry since 2020.
Industry leaders, including RAI CEO Adrian Cummins (pictured), had lobbied successfully for several extensions of the 9% rate.
The decision to return to the 13.5% VAT rate was well flagged by the Government since the hotel sector was subjected to widespread criticism from the public over soaring room rates, particularly in Dublin.
The 9% VAT rate was introduced in November 2020 during the Covid pandemic. It was extended in 2021, 2022, and finally in 2023, when it was designed to cushion the impact of rising inflation.
While the industry appears to have accepted the return to 13.5%, stakeholders are likely to campaign for new supports for the industry in Budget 2024.