Budget: NI restaurant owner tells Chancellor Jeremy Hunt 'We haven’t had profit margin since Covid, now please cut VAT'

Stevie Higginson, the owner of Square Bistro in Lisburn, described his restaurant as “tax collectors for the government” given the amount of VAT they have to pay.

VAT had been reduced for the hospitality and tourism sector during the pandemic but has since returned to 20%.

Mr Higginson said that VAT is the straw that is breaking the camel’s back for businesses like his: “VAT needs to be lowered as a matter of urgency. We are a small restaurant and we employ over 20 people.

"Put simply, we haven’t had a profit margin since Covid – we are tax collectors for the government.”

He continued: “The hospitality sector is reliant on high usage of energy and labour and VAT just adds to the crisis. Every day we have multiple increases – it’s unsustainable.

"Ireland has a tourism VAT rate at 9% there’s no reason why the UK can’t have the same.”

The VAT rate for the hospitality and tourism sector in Ireland decreased from 13.5% to 9% in November 2020. The reduced rate was extended until August under the cost of living supports announced in February.

Meanwhile, Lorraine Nelson of BDO NI – an audit, tax and business advisory firm – outlined key areas expected will be a focus for Chancellor Jeremy Hunt.

Ms Nelson said: “Whilst UK Government ministers remain tight lipped about what to expect [tomorrow], in his ‘Bloomberg Speech’ at the end of January the Chancellor did frame his four pillars for growth as Enterprise, Education, Employment and Everywhere, and set out his ambition to see the UK as having the ‘most competitive tax regime of any major country’.”

Discussing corporation tax said said: “Plans to increase the main rate of corporation tax to 25% from April 1 will put our rate of corporation tax at double that of our closest neighbours in the Republic of Ireland and will once

again impact the competitiveness of companies operating here.

"This was something that the Prime Minister was asked directly about on his recent visit to Coca-Cola in Lisburn, where he stated that the budget would provide some clarity.

"To counter the charge that this makes the UK less attractive to investors, we could see a corporate tax roadmap that outlines future cuts over the next three to five years.”

She added: “The Chancellor is looking to re-create ‘Silicon Valley’ in the UK and the future of work will need to ensure that our education system here is fit for purpose.”

In terms of employment Ms Nelson said: “BDO NI clients across Northern Ireland in various sectors have one major common issue – recruitment and retention of staff. Recent UK Government estimates suggest some 6.6 million people of working age are now economically inactive with only a quarter of them actively looking for work.

"Expect some government announcements on support for those struggling with childcare costs and a focus on how to move people into work.”

According to HM Treasury, Jeremy Hunt is expected to announce new measures to support families and businesses with the cost of living, before setting out an agenda to halve inflation, grow the economy and reduce debt.