Furious TV chef Brian McDermott has appealed for the government to re-think its 50% increase on VAT for the hospitality sector.
The celebrity cook from Moville, who regularly appears on RTE’s Today with Maura and Daithi, said the jump from nine to 13.5% could wipe out businesses in rural Ireland.
And he called for separate city and rural tax rates claiming it was not fair to slap country hotels and restaurants with the same VAT as Dublin’s nearly permanently full chains.
The father of two, who just three months ago opened his own Foyle Hotel in Moville in rural Donegal with wife Brenda, said he was staggered by the increase.
“I was listening to the budget live and, truthfully, I got a sickness in my stomach when I heard it.
“The worst we were expecting was an increment of 1 to 1.5 per cent this year.
“I never imagined it would jump to 13.5, which is a 50 per cent increase.
“The government argues the 9 per cent was there as an incentive to be availed of for the last four years but that does not apply to me who has been 12 weeks open this week.
“That’s my reward for reinvigorating a rural town with a new hotel and a huge investment.
“You can’t have a blanket VAT approach in Ireland when hotel prices in Dublin average €220.
“The summer season is over and hotels in Donegal and elsewhere are going seasonal and closing.
“Some of them are closing three days a week but we are going to close just one day to try and sustain the jobs we have taken on which are 38 brand new jobs.
“We had a business model for our hotel but now we have to rip it up and start again.”
The chef, author of bestselling cook book Brian McDermott’s Donegal Table, said he hoped for a 47 per cent occupancy in the Foyle Hotel for the first year compared to Dublin’s 92 and 93 per cent.
“The same VAT cannot apply across the country, it is too sore on rural Ireland,” he said.
“There has to be a city tax rate and rural tax rate. Nine per cent works, it allows you to have a lunch trade in a rural area whereas 13.3 per cent will make lunch opening hours seriously difficult and potentially will lose money for the business.
“It’s easy to say it is just added on but we are trying to build confidence in an area that did not have a hotel for 10 years.
“The effect of that increase has a huge impact. We are buying our fish in Greencastle and our veg and everything we can locally because we are trying to bring the community with us.
“You are trying to encourage people back out to eat so you can’t ask customers to take the hit of an increase immediately so early into a business like ours.
“You can control everything else in your business, how you buy, the number of staff, but not this. It’s a bad slap for creating 38 jobs.”
The chef said his last two month VAT bill was €16,350, which would rise next year to €24,000.
“The industry is absolutely fuming. My phone has been hopping all week because of this,” he said.
“Donegal is just getting itself together. They talk about the Wild Atlantic Way and all those incentives, and yes we are benefiting, but 49 per cent of people do not come past Galway. Facts are facts.
“We are not getting the full benefit of that so we have to self-medicate all the time.
“Now we have to shelve our business plan and be very creative to make it worthwhile for people to make the extra effort to get to Moville and Inishowen.
“The government just does not understand rural Ireland and I’m really angry because I did this for the greater good and put my money where my mouth is.”
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