Our pubs 'stuck in the middle' of England and Republic tax cuts: Industry body warns of impact of higher bills than rivals as Burnham 20% rates reduction doesn't apply in Northern Ireland
Northern Ireland’s pubs, clubs and venues face a double-whammy, trapped between rivals in both England and the Republic who benefit from major tax cuts that aren’t coming into force here.
That’s according to a local industry body, as a 20% reduction in business rates for the sector announced this morning by new Prime Minister Andy Burnham will only apply in England.
Three weeks ago, the Republic of Ireland chopped the VAT it charges to the hospitality sector by one-third, lowering it to just 9%. Equivalent businesses in Northern Ireland have to pay 20% VAT.
The reduction in property taxes for the sector comes into effect in England next year, part of a range of measures tackling cost-of-living pressures that Mr Burnham introduced during the first few days of his premiership. Due to devolved political powers, however, they won’t come into force in Northern Ireland unless Stormont agrees to mirror them.
For industry body Hospitality Ulster, that means the province’s pubs, clubs and venues are “stuck in the middle” – facing an uneven playing field, as competitors both over the sea and across the border are able to offer better deals and lower prices to their customers due to reduced tax bills.
And since hospitality is a vital part of Northern Ireland’s tourism draw, the body is worried that visitor numbers could take a hit if word gets around that a night out in Belfast is less good value compared to Manchester or Dublin.
Hospitality Ulster’s chief executive, Colin Neill, told the News Letter: “Today’s announcement of a business rate cut for pubs, clubs, and music venues by the Prime Minister applies only to England, and will generate no additional money for Northern Ireland.
“Again, it highlights the plight facing all hospitality businesses and the need to reform business rates here before the paused 2026 revaluation is rerun.
“Hospitality businesses here have weathered the devastating impact of Covid-19, soaring energy costs, an uncooperative high VAT rate and an increasingly unsustainable business rates burden with less financial help that our counterparts in Great Britain, all while continuing to provide jobs, invest in communities, and support our visitor economy.
“Hospitality remains one of Northern Ireland’s largest employers and a cornerstone of our tourism offering, but will now be stuck in the middle with higher business rates than our colleagues in England and higher VAT rates than our colleagues in the Republic of Ireland.
“If the Northern Ireland Assembly and UK government are serious about supporting economic growth, protecting jobs, and revitalising our high streets and city centres, then they must ensure hospitality receives the targeted support it needs.”
At the start of this year the province’s pubs, clubs and venues warned they’re fighting for their lives, as planned changes in the property tax system threatened to send business rates bills skyrocketing.
Some places were about to see their bills doubled or even trebled due to officials significantly increasing the worth of properties during a Stormont-driven revaluation, which in turn upped the rates owners had to pay on them.
After a lengthy outcry as the industry warned hefty tax hikes would see many businesses close, those plans were paused by Finance Minister John O’Dowd. Changes are still looming however, with a government consultation running until mid-September.