Middleton urges O’Dowd to address Derry/Donegal hospitality VAT differential

The DUP MLA asked the Minister of Finance to ‘outline what steps he is taking to support the hospitality sector in Northern Ireland following plans by the Irish Government to reduce their VAT rate for hospitality to nine per cent’.

At present the VAT rate for food-based hospitality in the south is 13.5 per cent but the Irish Government has said it intends reducing it to 9 per cent in the next Budget. In the North, where the VAT rate is set by London, it will remain at 20 per cent.

Responding to Mr. Middleton, Mr. O’Dowd said: “My Department has repeatedly highlighted to the Treasury the challenges facing our hospitality industry, particularly the high VAT rates faced by business here relative to the South.

"Unfortunately, the British Government, who are responsible for setting VAT rates, have so far been unwilling to address the issue.

"My Department continues to support the local hospitality sector through, for example, significant rate support, with 65 per cent of the sector in receipt of support via the small business rate relief scheme.

"My Department has commissioned an independent study of the cost of doing business here, which will consider the impact of North/South VAT differentials.

"I will continue to make the case for a reduction in VAT to enable our hospitality sector to compete on a level playing field in the all-island economy.

"That is an issue that I will raise with the Chief Secretary to the Treasury at the next Finance: Interministerial Standing Committee meeting, which is to be held later this month.”

Mr. Middleton said he was confident of the offering of the local hospitality sector and asked Mr. O’Dowd to meet representative bodies, such as Hospitality Ulster, ‘to listen to their ideas about how they can be supported to improve the hospitality industry’.

Mr. O'Dowd replied: I am always willing to meet key stakeholders to discuss these matters and listen to their ideas and proposals. I have already met representatives of a number of sectors and will continue to do so.”