Tailored VAT rate would help hospitality businesses with cost increases – Mullins

A tailored VAT rate for food service businesses should be implemented to mitigate the effect of cost increases, according to John Mullins, Fine Gael European Election candidate for Ireland South.

Speaking during a canvass in Greystones, Co Wicklow today (Thurs), Mullins vowed to be a strong advocate for the small and medium enterprise (SME) sector in Europe, adding there are a range of measures that could be implemented now to mitigate exorbitant cost increases.

John Mullins, a former CEO of Bord Gáis who now leads an international renewable energy company, said: “From speaking to business owners while on the campaign trail, it is clear there are real challenges across the SME sector and Government must continue to do all it can to safeguard jobs and protect the industry.

“One concern that often arises surrounds small and medium businesses that are largely treated the same as larger companies and chains in regard to VAT treatment.

“I believe that a lower rate VAT rate for food service businesses such as pubs, cafes and restaurants should be immediately implemented which would help them to keep their doors open.

“I know Fine Gael representatives have already raised the need for a lower VAT rate for smaller businesses, while larger businesses that can absorb higher costs would continue to pay the 13.5% rate.

“Recommendations from the Low Pay Commission on reducing Employers’ PRSI back to 8.8% from the current rate of 11.05% would also provide a lifeline for many smaller businesses.

“The introduction of the PRSI credit and the annual increase in the PRSI threshold has mitigated the effect of anomalies created by the sudden increase in the rate of PRSI on earnings above the minimum wage, but we need a permanent solution to ensure businesses are not negatively impacted.

“Employers’ PRSI on statutory sick pay should also be eliminated, reflecting the fact that in a serviced business, the payment of statutory sick pay represents a double cost as additional staff have to be paid to cover absences.

“Current Revenue penalties on businesses for filing late returns currently stand at 10% of the CAT due that year. It would be ideal if this charge was waived until the end of the year in recognition of the significant pressures currently being felt by businesses.

“Fine Gael has always been the party of business. That is why the party is Government is best placed to help enterprises of all sizes through turbulent times to ensure they are viable and sustainable into the future.

“I also want to praise the work of Fine Gael’s Small Business & Enterprise Council and it’s chair Kathryn Lynch, which through a range of workshops and conferences, is giving those involved in the SME sector an opportunity to engage with senior Government ministers on important matters to ensure they are addressed,” John Mullins concluded.

Kathryn Lynch, Chair of the SBE Council, said: “The SBE Council advocates for small business across Ireland, recognising the economic, social, and cultural value they bring to our country and communities. These businesses are under real pressure at the moment and we will continue to bring their concerns and experiences to government leaders at every opportunity.”