More than 200 hospitality firms have closed in Northern Ireland this year says trade group
More than 200 hospitality businesses have closed in Northern Ireland since January, an industry body representing takeaway businesses has claimed.Calling on the UK Government to use the north as a pilot region for a lower rate of VAT for the hospitality trade, the Northern Ireland Food to Go Association (NIFTGA) said around 40 firms a month are closing in 2026 under unprecedented cost pressures and increasing competition from across the border.The call to lower the 20% VAT rate in Northern Ireland comes as the Republic prepares to cut VAT for hospitality from 13.5% to 9% from July 1.Designed as a government intervention to alleviate some of the pressure on smaller firms from rising energy and staff costs, the initiative is being targeted at the Republic’s restaurants, cafés, takeaway outlets and hairdressers, but will not include alcohol or hotels.Certain businesses across the north will benefit from a temporary cut in VAT to 5% over the summer following an announcement by Chancellor Rachel Reeves last month.But the two month haircut will be limited to tickets for theme parks, zoos and museums.A new report from Trade NI presented at Westminster last month proposed a five-year VAT pilot for hospitality and tourism.Trade NI includes Hospitality Ulster, which maintains VAT is one of the most effective levers available to stimulate demand, drive footfall and protect jobs.NIFTGA’s chief executive Michael Henderson said the case has never been stronger for using Northern Ireland as a test case for VAT reform.He said the gulf in the rate of VAT for hospitality on the island means businesses in border areas face the added challenge of competition with their counterparts in the Republic.“More than 200 hospitality businesses have closed their doors this year alone,” he said.“Many of these are independent operators serving local communities, employing local people and supporting local supply chains. “The reality is that rising labour costs, National Insurance increases, energy bills, food inflation and business rates pressures are becoming increasingly difficult for businesses to absorb.“We cannot continue asking local businesses to compete with one hand tied behind their back.”The Economy Minister Caoimhe Archibald is supportive of the industry’s calls.In a joint letter to the Treasury, penned with Finance Minister John O’Dowd, she urged the Chancellor to consider a reduced VAT pilot scheme for hospitality within the north.She said the summer reduction for tourist venues “does not address the longstanding VAT disparity faced by our broader local hospitality industry compared to the south”.She added: “Targeted adjustments to VAT can be made when the political will is there and I urge the Chancellor to consider options for more meaningful and lasting reform.”
