𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Pubs and restaurants in Northern Ireland will not get a special tax cut to “maintain a price competitiveness” with the Republic, a Treasury minister has signalled.

From July, VAT on food, catering and hairdressing businesses will be reduced from 13.5% to 9% in Ireland.

But in Northern Ireland, as in the rest of the UK, VAT charged on most hospitality services will remain at 20%.

Treasury minister Dan Tomlinson said VAT “is a national tax in the UK at 20% across the country and it is important to have that consistency for businesses operating across the UK as a whole”.

He also told the Commons that hospitality firms would benefit from the Great British Summer Savings programme, which begins on Thursday.

The scheme will see VAT cut from 20% to 5% on children’s meals served in restaurants, children’s and family tickets for cinemas, theatres and exhibitions, and children’s and adults’ tickets to attractions such as theme parks, museums, zoos and soft play centres. It will end on September 1.

Alex Easton, independent MP for North Down, asked: “Will the Chancellor now look at a minimum trial or indeed permanently reducing the rate of VAT for the hospitality sector in Northern Ireland to maintain a price competitiveness, safeguard UK jobs and businesses, and make us more competitive with the Republic of Ireland?”

Mr Tomlinson said: “I do understand that there are different rates of VAT in Northern Ireland than in Ireland.

“There are different rates of VAT across Europe.

“I think it’s important, though, that we remember that VAT is a national tax in the UK at 20% across the country and it is important to have that consistency for businesses operating across the UK as a whole.

“And significant cuts to VAT do come with significant fiscal costs – halving the rate of VAT on hospitality, for example, would cost the Exchequer around £11 billion.”

Northern Ireland Food To Go Association chief executive Michael Henderson has previously backed calls to slash the VAT rate on hospitality to 10%.

He said in a statement: “Food-to-go businesses, independent cafes, coffee shops, delis and takeaways are the backbone of many local communities, yet they continue to face unprecedented pressures from rising wage costs, National Insurance increases, energy bills, insurance costs and reduced consumer spending.

“Since the beginning of this year alone, more than 200 hospitality and food service businesses have closed across Northern Ireland.”

Robin Swann, the Ulster Unionist Party MP for South Antrim, earlier this month tabled an early day motion in Parliament, calling for a 10% VAT pilot in Northern Ireland, which Mr Easton has supported.