Hospitality closures top 200 as industry backs call for Northern Ireland VAT cut

More than 200 hospitality and food service businesses have closed across Northern Ireland since the beginning of the year, industry leaders have claimed, as support grows for a proposal to cut VAT to 10 per cent in a bid to protect jobs and struggling local firms.

The Northern Ireland Food to Go Association (NIFTGA) has publicly backed South Antrim MP Robin Swann’s call for a Northern Ireland hospitality VAT pilot, arguing that businesses are facing unprecedented financial pressures and urgently need practical support rather than further costs.

The intervention comes after Mr Swann tabled an Early Day Motion in the House of Commons urging the Treasury to introduce a pilot scheme that would reduce the hospitality VAT rate in Northern Ireland to 10 per cent.

While an Early Day Motion does not automatically trigger a parliamentary debate or vote, it places an issue on the official parliamentary record and allows MPs to demonstrate support for a proposal, helping build pressure for government action.

Industry says businesses are under growing pressure

NIFTGA, which represents Northern Ireland’s food-to-go sector, says independent cafés, coffee shops, delis, takeaways and other hospitality operators are being squeezed by rising costs on multiple fronts.

According to the organisation, businesses are contending with higher wage bills, increased National Insurance contributions, rising energy and insurance costs and weaker consumer spending at a time when many are already operating on tight margins.

Michael Henderson, Chief Executive of the Northern Ireland Food to Go Association, said the sector had been campaigning for a VAT pilot for a considerable period and welcomed Mr Swann’s efforts to raise the issue at Westminster.

“We welcome Robin Swann MP’s support for a 10% VAT pilot for Northern Ireland and thank him for helping to raise this critical issue in Parliament,” he said.

“For the Northern Ireland Food to Go Association, this is not a new conversation. We have been campaigning for a Northern Ireland VAT pilot for a considerable period and have worked extensively with businesses, elected representatives and government departments to highlight the unique challenges facing our sector.”

Competitive disadvantage highlighted

A key argument advanced by both Mr Swann and the association is Northern Ireland’s proximity to the Republic of Ireland, where hospitality businesses continue to benefit from a lower VAT rate.

NIFTGA argues this creates a competitive imbalance, particularly for businesses operating close to the border, affecting consumer spending patterns, investment decisions and long-term growth opportunities.

Mr Henderson said the association believes a targeted pilot would provide valuable evidence on whether a reduced VAT rate could help strengthen local economies while supporting employment and business sustainability.

“The case for a Northern Ireland pilot is particularly compelling given our proximity to the Republic of Ireland, where hospitality businesses continue to benefit from a significantly lower VAT rate,” he said.

“This creates a competitive imbalance for businesses operating close to the border and impacts investment, growth and consumer spending.”

Proposal aimed at protecting jobs and local economies

Robin Swann’s Early Day Motion highlights the importance of hospitality businesses to Northern Ireland’s economy, noting that the sector employs thousands of people and plays a key role in sustaining town centres and local communities.

The motion calls on the Treasury to introduce a pilot scheme reducing hospitality VAT to 10 per cent in Northern Ireland, arguing that the move could help safeguard jobs and promote economic growth.

Supporters of the proposal contend that a lower VAT rate would give businesses greater room to invest, retain staff and remain competitive during a period of sustained economic pressure.

NIFTGA says the growing political support behind the proposal is encouraging and believes the conversation is becoming increasingly urgent as more businesses face difficult trading conditions.

“The reality is simple. Small businesses do not want handouts. They want the opportunity to compete, invest and grow,” Mr Henderson said.

“A VAT pilot would be a practical step towards delivering that.”

With pressure continuing to mount across the hospitality sector, supporters of the proposal hope the issue will gain traction at Westminster in the months ahead.

Whether the Treasury is prepared to consider a Northern Ireland-specific VAT pilot remains uncertain, but advocates argue the rising number of business closures has made the debate increasingly difficult to ignore.