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Dublin Town calls for zero rating of VAT on service charges within the hospitality sector.

  • Tue 27 November, 2018

Dublin Town calls for zero rating of VAT on service charges within the hospitality sector.

Today, DublinTown, is asking Minister for Finance and Public Expenditure, Paschal Donohoe to remove the vat rate on service charges and give full service appreciation back to employees.

The recent rise in VAT for hospitality from 9% to 13.5% is only a windfall for the taxman as patrons will now find themselves paying 13.5% on top of their service charge.  In levying this additional tax charge, tax compliant businesses and their employees are being penalised.  Where an employer collects a service charge and distributes it to its employees, the employee is already subject to income tax on the receipt but now the customer will pay more by way of increased VAT with no benefit to the employers who provide the service.

DublinTown requests that the service charge element of a hospitality bill is zero rated and that Finance Bill 2019 contains the necessary provisions to ensure this.  It is only fair that the appreciation shown by patrons is received in full by those who have earned it.  DublinTown would ask the unions representing workers in the industry to support this call.

Richard Guiney CEO of Dublin Town stated: “The hospitality industry in Dublin City Centre has grown in strength and confidence in recent years.  As many people now visit the city to socialise as to shop.  The city’s food and beverage offering constantly exceeds the expectations of visitors and is increasingly becoming a crucial element allowing Dublin to meet its ambitious tourist growth targets.  It is only fair that the appreciation of staff is not allowed to remain a VATable activity.  We therefore call on Minister Donohoe to zero rate service charges in the forthcoming 2019 Finance Act so those working within this vital industry feel the full benefit our appreciation of their service.”