{"id":561072,"date":"2026-06-30T05:53:14","date_gmt":"2026-06-30T05:53:14","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/561072\/"},"modified":"2026-06-30T05:53:14","modified_gmt":"2026-06-30T05:53:14","slug":"if-the-number-of-insolvencies-is-declining-does-hospitality-sector-need-vat-rate-cut-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/561072\/","title":{"rendered":"If the number of insolvencies is declining, does hospitality sector need VAT rate cut? \u2013 The Irish Times"},"content":{"rendered":"

Perhaps the biggest fault line running under the Irish economy at the moment is the impact of the Strait of Hormuz crisis <\/a>on energy prices, which are expected to squeeze household incomes and consumer spending this year. <\/p>\n

PwC\u2019s latest insolvency monitor gives something of a window into the current state of play.<\/p>\n

One of the most eye-catching figures <\/a>in the report is the 35 per cent surge in retail business failures in the first half of the year. It\u2019s difficult to say what\u2019s driving this, precisely. In the early months of the year, however, the sector was roughed up, first by stormy weather and then by the fuel protests in April, which caused some businesses to close their shutters.<\/p>\n

\"\"Has the Irish building sector got themselves hooked on Government subsidies?<\/p>\n

Retail sales volumes were essentially flat in the 12 months to the end of May, according to the Central Statistics Office. Clothing and footwear sales were down 7.5 per cent in May from the same month last year. There were also sharp declines in furniture and fuel sales.<\/p>\n

Worse is probably still to come for the sector. Consumers are expected to pare back their discretionary spending as the full effect of the global energy crisis feeds through to various sectors. <\/p>\n

Interestingly, bars and restaurants <\/a>have been among the better-performing retail businesses over the past year. Volumes in those areas of the economy have been little changed over the past year, while sales values have increased as operators hiked prices.<\/p>\n

According to PwC, company insolvencies <\/a>in the hospitality sector have fallen by more than a quarter so far this year compared with 2025. Some 28 company failures were recorded in the sector in the first half, down from 81 last year and well below the long-term average, suggesting some \u201cstabilisation\u201d. <\/p>\n

Later this week, hospitality businesses <\/a>of all shapes and sizes, regardless of the health of their balance sheets, will get a big boost when the Government slashes the VAT rate to 9 per cent, in line with the promises made in last year\u2019s budget. <\/p>\n

The total cost to the taxpayer <\/a>is expected to be \u20ac232 million this year and \u20ac681 million for a full year. If the policy lacked economic justification when it was unveiled last October, it seems even more remarkable now. <\/p>\n","protected":false},"excerpt":{"rendered":"Perhaps the biggest fault line running under the Irish economy at the moment is the impact of the…\n","protected":false},"author":2,"featured_media":561073,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[174],"tags":[79,2355,2190,179,18,19,17,2356,24727],"class_list":["post-561072","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-cantillon","tag-cost-of-living","tag-economy","tag-eire","tag-ie","tag-ireland","tag-pwc","tag-vat"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/116837509709277952","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/561072","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=561072"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/561072\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/561073"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=561072"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=561072"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=561072"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}