By Dionne Meehan and Róise Collins
A LETTERKENNY hairdresser has voiced her concerns that the VAT rate increase has resulted in a sense of uncertainty among affected businesses.
On Friday, the VAT rate for tourism, hospitality and some other services increased from nine per cent to 13.5 per cent.
VAT was reduced in November 2020 as part of Government efforts to lessen the financial blow felt by businesses due to the pandemic.
The planned increase went ahead despite last minute pleas by business organisations for retention of the lower rate to help businesses cope with the rising cost of utilities and products.
Commenting on the VAT increase, Tina McBride, from Pello Hair Salon in Letterkenny said the problem at the moment is that inflation is ‘running rampant.’
“Everything is just increasing so much.
“The cost for every business is just going through the roof.
“It makes it very difficult for the clients and all the guests that come in to us,” she said.
However Tina said prices have gone up across the board, not just with the VAT increase.
“Unfortunately, our products have gone up in price and I am sure this is the same for every hairdresser.
“Everything has increased across the board because of the war, Brexit, etc.
“At the moment there is an awful lot of economic turbulence out there,” she said.
With this resulting in a lot of pressure being placed on consumers, Tina said employment could be affected due to the knock on affect on businesses.
“Can businesses keep employing big numbers of people?
“Are they going to get the same amount of clients coming through their doors?
“We are all very conscious of the fact that we do not want to increase our prices but you are pushed to, you have no choice but to do it,” she said.
With Budget 2024 looming, Tina said she doesn’t know what January will bring.
Despite the VAT increase not having a positive impact on businesses, Tina is thankful her salon is well established and always busy.
“I hope it stays like that,” she said.
However, Tina expressed her concerns for salons that are just starting out.
“I feel very sorry for businesses that aren’t as well established because they are going to find it very hard,” she said.
With the future uncertain for many hairdressers, Tina said despite business being great now, she can’t say what it will be like in a few months.
Chef Martin Anderson during the busy lunchtime service at Sonder.
Meanwhile, the hospitality industry has also been hit with the same VAT hike.
Local restaurant owner Martin Anderson said he believes the small, individual coffee shop, café, restaurant, or takeaway is being penalised for the larger establishments that have taken advantage.
Martin explained that at his restaurant, Café Sonder, they have sustained costs for as long as physically possible but because of the VAT increase he is no longer in the position to absorb them.
Following Friday’s VAT increase they were left with no choice but to adjust their menu prices.
“The general public has to appreciate it is not the restaurateurs that is making the extra 4.5 per cent.
“ I am collecting the 13.5 per cent for revenue.
“Everybody in the town is doing a great job and we all try and look after our customers but it is inevitable now, because of the direction from the revenue, that prices have to be increased because we wouldn’t be in a position to absorb them,” he said.
Receive quality journalism wherever you are, on any device. Keep up to date from the comfort of your own home with a digital subscription.
Any time | Any place | Anywhere
SUBSCRIBE TO CURRENT EDITION TODAY
and get access to our archive editions dating back to 2007(CLICK ON THE TITLE BELOW TO SUBSCRIBE)
"These awards celebrate the people that make the restaurant sector the dynamic and exciting industry it is."
ONE of the county’s best known chefs continues to live by his ‘local ethos’ as he teamed up with...