LVA welcomes return of VAT 9
The reintroduction of the 9% VAT rate for food service puts is a welcome and critical support for food pubs at a time when cost pressures continue to rise, according to the Licensed Vintners Association (LVA).
From the 1 July 2026, the VAT rate charged on food served in pubs and other hospitality outlets will return to 9%, having been increased to 13.5% in September 2023. Following extensive campaigning on the matter by the LVA and the other hospitality representative bodies, the government confirmed in Budget 2026 that the rate would return to 9% from July onwards.
Jump in minimum wage and other costs
The LVA notes that pubs and hospitality businesses continue to face significant cost pressures, with the most severe being the costs associated with employment, food and drink, energy and insurance. For example, since the end of the pandemic, the minimum wage has increased by 35%, while inflation during the same period rose by 17% according to the Central Statistics Office (CSO).
“We are relieved and satisfied to finally see the return of VAT9,” said Donall O’Keeffe, CEO of the LVA. “This is a measure we have been pressing for from the moment the government said they were going to scrap it in the first place. At a time when cost pressures in the hospitality industry continue to rise, this is a very welcome and critical support for those within the hospitality sector who serve food.
“We know there has been opposition to the reintroduction of VAT9, so we would like to thank the government for sticking to their word and making this commitment a reality. We especially would like to note the telling contributions of Tánaiste and Minister for Finance, Simon Harris TD and his Cabinet colleague Minister for Enterprise, Tourism and Employment Peter Burke TD, who have both understood why this VAT rate and this policy matters so much to those within the food service cohort of the hospitality sector,” he said.
Not everyone benefits from VAT9
While welcoming the reintroduction of VAT9, the LVA also noted that the majority of pubs in Ireland do not serve food, and so will not benefit from this measure.
“Of course, it should also be noted that the majority of pubs in Ireland do not serve food and as such there is a sizeable chunk of the hospitality sector who will not feel any benefit from this change to the VAT rate,” O’Keeffe added. “With pubs continuing to close their doors for good all around the country, we would ask that the Government keep this in mind ahead of their formulations for Budget 2027. We will certainly be pressing for an excise reduction for those businesses in the months ahead,” O’Keeffe said.
