Vat on food services and hairdressers down to 9%

Brendan Burgess

Brendan Burgess

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Reduced 9% VAT rate for hospitality sector and hairdressers​

In line with the commitment in the Programme for Government to further support businesses and help them to retain jobs, I am reducing the VAT rate from 13.5 per cent to 9 per cent on food and catering businesses and for hairdressing services.

This measure will come into effect from the 1st of July 2026. This will cost €232 million in 2026 and €681 million in a full year. It reflects the Government’s commitment to support businesses in the services sector who are facing increased cost pressures. Furthermore, it will support more than 150,000 jobs in these sectors right across the country.
 
The main beneficiaries of cheaper hair cuts

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demoivre said:
there's not a hope this VAT reduction will be passed on to the consumer imo.
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The VAT reduction was never about passing it on to the consumer but more about increasing the bottom line of the business as they struggle to make a profit
 
Cervelo said:
The VAT reduction was never about passing it on to the consumer but more about increasing the bottom line of the business as they struggle to make a profit
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Employment in that sector was up 7% in Q1 this year....up 11% since 2019.
Analysis of the churn in the industry v's a study in the UK shows very little variance.

This is a victory for the restaurant lobbyists and Adrian Cummins in particular. He's played a blinder on this
 
Brendan Burgess said:
Why hairdressing?
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It's a hair brained idea. But is probably because a minister has a lot of hairdressers in the family.

If one purchases a meal for 29 Euro, that's 25 + VAT of 13% = 29, we are now all going to dine out much more because instead of it being 29, it will be 25 + VAT of 9%. = 28 That's an amazing incentive all right.
 
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Bronte said:
If one purchases a meal for 29 Euro, that's 25 + VAT of 13% = 29, we are now all going to dine out much more because instead of it being 29, it will be 25 + VAT of 9%. That's an amazing incentive all right
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There isn't a single restaurant in Ireland is going to pass through that reduction. They're simply going to use it to try and offset the cost of Auto Enrollment and the increase in minimum wage.
 
Peanuts20 said:
There isn't a single restaurant in Ireland is going to pass through that reduction. They're simply going to use it to try and offset the cost of Auto Enrollment and the increase in minimum wage.
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Basically the government is funding the min wage increases and AE costs for the restaurant sector.

It’s times like these I prefer the US/Canadian system of taxes not included. That way the consumer sees the change in what is added to the advertised price which stays the same.

Pocketing the Value Added Tax makes a joke of it.
 
ClubMan said:
Awful system in my opinion
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It has its frustrations but the there is far greater transparency around government taxes and less opportunity for retailers to just pocket tax reductions.

Living somewhere you get pretty use to the taxes.
 
The barber used in my family increased their price from €15 before covid to €25 now, that correspond to when they organised booking and payment online. With these type of increase, one could wonder how they struggle to keep their profit. The cynical in me also wonder if the increase was due to the increase reporting with the online payments.
My hairdresser clearly said that they had to increase their price because of the VAT increase a couple of years ago... it certainly worked on the way up!
 
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