Ulster Unionist Economy spokesperson Diana Armstrong MLA, who has consistently raised the ongoing issue of the hospitality VAT differential between Northern Ireland and the Republic of Ireland, has received a response from the Minister of Finance to her Assembly question. In that question, she pressed the Minister on what financial modelling the Department has undertaken to assess and mitigate the risk of hospitality business closures in border areas arising from the Republic’s more competitive VAT rates.

Diana Armstrong MLA commented:

“The Minister’s reply referenced departmental research highlighting the disparity in VAT rates across this island and the financial advantage this provides to hospitality businesses operating in the Republic. The modelling indicates that a small guesthouse in the Republic could save approximately £71,000 per year under the lower VAT rate, while a large hotel could save in the region of £545,000 annually.

“I have consistently challenged the Minister of Finance to do everything within his power to protect the viability of our hospitality sector, particularly in communities along the border. We cannot allow Northern Ireland businesses to operate at a structural economic disadvantage. When a competitor benefits from lower operating costs, they have greater flexibility to reduce prices, reinvest in their premises or offer more competitive wages. That reality is placing real pressure on local employers.

“This is not a marginal difference. Quite frankly, it amounts to tying one arm of our border hospitality businesses behind their back and expecting them to compete on equal terms.

“Northern Ireland businesses cannot be expected to compete fairly when such a significant tax disparity exists. The priority must be ensuring that our economy is equipped to compete and attract investment in its own right.

“My position is straightforward. Northern Ireland’s economy should be capable of competing confidently with that of the Republic of Ireland. That is an ambitious goal, but it is one that reflects our potential and our talent. We should not undersell what Northern Ireland can achieve. This has been a cornerstone of Ulster Unionist policy and we will continue to champion this going forward in the Assembly and at Westminster.

“People need jobs, thriving local businesses and a functioning economy. That must remain our focus.”