Towards the end of the summer, we spent a few weeks in west Cork. It was a relaxing time, popping into cafés for coffee or treating the kids to dinner out.

The more places we visited, the more I saw yellow VAT 9 posters in restaurant windows or on toilet doors in cafés, especially in one of our favourite places to visit, The Fish Basket.

Café in the morning, fish and chips shop in the afternoon, not only is the food and coffee top class, there are stunning views overlooking Long Strand (which as the name suggests is very long and beautiful).

Every year, when owners Peter and Elaine Shanahan see me walk in, they know they have a daily coffee customer for the next two weeks.

“What’s the deal with all the yellow posters, Peter?” I ask as he makes my flat white. “It’s the VAT, Ciara,” he replies, “it’s crucifying us.”

Looking back to 2020, VAT for service providers, including cafés, restaurants and hotels rested at 13.5% but when the pandemic hit, that was knocked back to 9%.

In August 2023, despite much campaigning, the Government put it back to 13.5%. However, by that stage, it wasn’t an even playing ground and in the past year, The Fish Basket and many other small businesses have really suffered.

“The price of everything has gone up,” Peter says to me. “Electricity, gas, wages. And if you’re to look further afield, there is the war in the Ukraine, the situation with the Suez Canal, all these things are having an everyday impact on the price of fish, coffee, even ingredients like flour – the prices have gone nuts. And we can’t keep hiking our prices to counterbalance that. Families are also feeling the pinch and we want to offer value for money.”

Industry concerns

Peter is not alone in his concerns and the more he talked to friends in the industry, the more they agreed they couldn’t remain silent on this.

So, six businesses in west Cork got together earlier this year to set up the VAT 9 group.

Support has expanded far beyond the southern tip of the country, with the Restaurant Ireland awards being a turning point in the campaign. Now, hundreds of businesses are displaying the posters and wearing the stickers.

And we can’t keep hiking our prices. Families are also feeling the pinch and we want to offer value for money

“We got a meeting with former Minister for Finance Michael McGrath in the summer,” Peter told me, “and there was a lot of emotion in that room, we put our heart and soul on the table. We got the feeling it was really resonating with him, that it was hitting home just how much businesses are struggling and that it would make a difference when it came to Budget 2025.

"However, the following week, it was announced that he was heading for Brussels. It was very disappointing and despite numerous requests, we haven’t been able to get an in-person meeting with Minister Chambers.”

Every week, we are hearing about restaurants closing, saying it is just not tenable to survive. When Peter got really honest with me about their accounts, I could see why.

Looking at their July/August accounts, they were busier than ever but compared to the same period when the VAT was 9%, they were down €7,000. That is the difference between them being able to invest in their business or not.

Summer is by far their busiest season and looking into the winter, they have no nest egg to fall back on. Last November, for the first time in their six years of business, Elaine had to go to the bank for an overdraft.

We don’t want to hear of rural businesses struggling like this and in light of our Break the Cycle campaign, we must highlight that this situation is causing stress and pressure, impacting on people’s mental health.

The Government is limited in what it can do about increasing prices, but the VAT – that’s something it can control and would make a massive difference to rural business owners.