Hospitality V Day

Today (Tuesday, 7th October 2025) promises to be a significant date for the hospitality sector, with the widespread expectation that the Minister for Finance, Jack Chambers, will announce a 9% VAT rate for most industry services as part of Budget 2026.

There will be a delay, however, before the benefits are enjoyed by restaurants and food service providers, as the measure is likely to come into effect in July 2026 rather than on Budget Day. This timing will help the Budget arithmetic, as only half of the cost of the measure (around €400m) will be incurred next year, while the full impact (around €800m) will apply from 2027 onwards.

It is also expected that the new VAT rate will not apply to accommodation.

The VAT reduction is part of the current "Programme for Government", but a decision to include it in the 2026 Budget was the subject of protracted negotiation between the Departments of Enterprise and Finance. It resulted in a compromise which would mitigate the cost in the current year and provide space for other spending in a €1.5bn tax package.

The move will be welcomed by industry bodies which lobbied for the concession, including ITIC, IHF, LVA, VFI and particularly the Restaurants Association of Ireland, whose CEO Adrian Cummins played a leading role.

While nothing is certain until the Budget has been officially unveiled, this could be a memorable day for Hospitality.

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