#Budget2020 Case Studies: Donegal businessman calls for government to give clarity on Brexit spending

Brian McDermott, proprietor of the Foyle Hotel in Moville, said there will be major causalities in the border region and called for the government to release funding before it is too late.

The border trader also criticised the decision not to reduce VAT for the hospitality sector in Tuesday’s budget.

He said: “The budget saw no change to the 13.5% tax rate for the hospitality sector, which is probably the most frustrating and bad strategic move on behalf the government. It is hampering and killing off businesses in the border area.

“Now we are facing unprecedented times and with the sterling so low it’s left Donegal not being the most natural escape, especially people for Northern Ireland as they don’t have a fair exchange rate, plus the insecurity of Brexit has damaged consumer confidence.

“We have been trying to showcase the area, from our very strong message on food to selling the story of buying into the local economy.

“Less than two years ago there was a favourable VAT rate and Donegal was hopping in terms of immediate and frequent breaks, but Brexit has knocked consumer confidence.

“The budget will not do us any favours.”

The chef said that he and his staff are working “tirelessly” to keep the doors open.

“We are talking open survival, not profit,” he added.

“The contingency plans sounds like a cheap softener. I have previously heard that there would be more money but it need to go to border areas as it’s a border issue and industry problem.

“As an operator, I will be watching to see where this is being made available.

“There is going to be causalities and there is no celebration, and central Dublin does not get how severe it is.”

Oyster farmer and owner of Killowen Shellfish Darren Cunningham said the threat of Brexit has stalled investing more money in his business.

Darren, who works at Carlingford Lough, has been an oyster farmer for ten years.

“As someone who works on the border I cannot forward-plan, I just hope for the best,” he said.

“I would have invested three or four times more had it not been for the threat of Brexit. I cannot throw money at something that I don’t know whether it will work.

“I think the Irish government has done everything it can to address the fears people have about Brexit.

“I think tariffs will be bad – we are shipping out live oysters which are picked up by a southern company on a Friday and by midday Sunday it will reach our customers.

“The oysters are alive and in good condition so we are very worried about delays. It’s my biggest fear as they are living creatures.”

Darren, whose business is north of the border, said he does not expect the same Brexit contingency funding from the UK Government.

“No-one knows what will happen because no-one can give us an answer,” he added.

“I wouldn’t imagine they (UK Government) will do anything like that as Stormont isn’t up and running. It’s a mess and there’s no getting round it.”

“I’m really underwhelmed by the education spend too, if you look at capitation grants, there’s no increase there either, parents will still end up footing the burden through voluntary contributions if capitation is not increased, so that’s another example of parents not being considered in the budget.”

The Capitation Grant is paid to primary and voluntary secondary schools and is based on the number of recognised pupils enrolled in the school.

Hospitality VAT rates driving staff off the books, hairdressers claim

The current VAT rate on hospitality is driving hairdressing staff off the books and harming the industry, it has been claimed.

Today's Budget for 2020, announced by Finance Minister Paschal Donohoe, saw no change to the 13.5% tax rate for the hospitality sector despite campaigning from a number of industry bodies to have the rate lowered as the spectre of a no-deal Brexit and subsequent recession looms large.

The tax was cut to 9% to stimulate the tourism industry in 2012 but later restored to pre-recession levels as part of Budget 2019.

Hairdressers remain listed in the hospitality sector, despite campaigning for a change, stating that the apprenticeship and training required for the role designates that it is a skilled practice.

Jenni Crawford, an award-winning hairstylist from Kazumi salon in Dublin city, says the industry is feeling let down.

“It brings us back to the situation where we’re seeing a knock-on effect, clients are taking on less treatments, purchasing less in the salon, and then eventually turning to home hairdressing,” she said.

“Which in turn leads to more hairdressers saying to themselves, ‘why would I pay this VAT rate when I can do this off the books, and deliver a service to someone’s home, cheaper for the customer and the hairdresser’?

“I think the government should’ve held back, we were only getting back on our feet, people are a lot more aware of what’s in their purse, we all spend differently, but people were adjusting to life after recession, comfortable coming back to the hairdressers, when the price shot up again with the VAT.

Now more bills are going up, higher carbon taxes, parking is going up, diesel is going up, going to the hairdressers is always the first to be cut out, or leads to hairdressers going off the books or cutting corners.

“In Dublin city, you could be talking €16 parking while you’re in getting your hair done and prices increased due to the VAT, and people start thinking they can’t afford it.

“With Brexit, an awful lot of our product comes from distributors in the UK, so the price of that is going to go up too, we have to be very careful about what and how we buy now.

“We should never have been listed in the service industry, it’s a four-year-long apprenticeship, we spoke to the government in 2008 about changing our status, but you feel like these rates and laws are made without speaking to the people involved.

“The vast majority of hairdressers in Ireland are small businesses, independently owned, and these are the people who need a hand-up.

“In rural Ireland, with more taxes, less money, the small main street salon, which can be the heart of the community, will suffer.

“Any instance where people feel like they have less money in their pocket, going to the hairdressers is always first to go.”

Restaurant Association chief executive Adrian Cummins told Newstalk Radio that the hospitality rate should have been changed.

“We are the most uncompetitive country in Europe to do business in and the government haven’t addressed that,” he said.

“Specifically in our industry, there seems to be an attitude that everything is going well – but it isn’t.

“We are finding it very difficult to survive in businesses.”