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Supports in Budget will bring 'some degree of confidence' to publicans, Vintners Federation says

Paschal Donohoe announced the various reliefs for the hospitality sector today.

Image: Shutterstock/ESB Professional

THE VINTNERS FEDERATION of Ireland (VFI) has said measures introduced in Budget 2021 to aid the sector will “bring some degree of confidence” to publicans. 

However, the VFI added that there is disappointment that the Budget “failed to reflect the fact that these outlets will have been closed for almost nine months with minimum support”. 

The VFI said its key aim for the medium term is to ensure pubs can survive until either a vaccine is found or the pandemic subsides, allowing pubs to once again trade normally. 

The government’s raft of Covid-19 related reliefs include a new scheme for businesses which have been most impacted by the pandemic, such as pubs and hotels. 

The Covid Restrictions Support Scheme (CRSS) has been established “to provide targeted support for businesses”, according to the Department of Finance.

“The sectors impacted by the current Level 3 nationwide restrictions are accommodation, food and the arts, recreation and entertainment. If the government decides to move to a higher level of restriction then other sectors may qualify,” Donohoe said today. 

The scheme, which will operate when Level 3 or higher of the Covid roadmap is in place, will see businesses receive weekly payments of up to €5,000 if they are forced to close or effectively close because of prohibited or restricted assess by customers.

The VFI has welcomed the announcement of the CRSS. 

“It’s clear pubs will be exposed to the full force of social distancing measures to suppress the spread of Covid-19 until a vaccine is found. In that context, the Budget needed to reflect the reality our members will face over the coming months,” VFI chief executive Padraig Cribben said. 

“The CRSS provides a degree of hope in that it will supply much needed grant support to publicans for the next five months if we remain at Level 3 or higher,” Cribben said. 

The new scheme provides a bridge to the future where Covid is over and normal life resumes. 
Publicans have paid a huge price for closing their businesses, so this announcement is the least they deserve. Government needs to address the fact these businesses have been closed for a protracted period and reflect that in the support package.  

The CRSS rebates will be based on average 2019 weekly turnover, and will be paid in addition to the Employment Wages Subsidy Scheme (EWSS). 

Donohoe said that payments will be calculated on the basis of 10% of the first €1 million in turnover and 5% thereafter, based on average VAT-exclusive turnover for 2019. It will be subject to a maximum weekly payment of €5,000.

“The scheme will operate on a self-assessment basis and qualification will require a business to demonstrate that their turnover has been severely impacted; that is it may not exceed 20 per cent of the turnover for the corresponding period in 2019,” he continued. 

The CRSS comes into effect today and those who meet the criteria have been urged to contact the Revenue Commissioners as soon as possible. It’s expected the first cash payments will be made by mid-November. Qualifying businesses can claim in week 1 and valid claims will be repaid for the entire period of the restriction within 2-3 working days.

The payments will cease when restrictions are lifted, and the entire scheme is due to close on 31 March 2021.

Publicans have been very vocal on the threat to their livelihoods since they shut their doors in March. Dublin’s so-called wet pubs (those which do not serve food) have not done one day’s normal trade since March. Other pubs nationwide got a slight reprieve last month where they were all able to open.

However, last week’s move to Level 3 nationally has meant these pubs can only serve outdoors.

More than a fifth of pubs in Ireland have continuing costs of up to €2,000 a week to sustain while generating no revenue during lockdown, according to a new report from the Drinks Industry Group of Ireland (DIGI) earlier this week.

DIGI chairperson Liam Reid also welcomed the announcement of the CRSS today, but added that “we must now move to establish a pathway for the reopening and, importantly, long-term recovery” of the sector. 

“The journey for Ireland’s drinks and hospitality industry has only begun, and it will be a lengthy one,” Reid said. 

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“Targeted, long-term policy decisions need to be taken to help this industry recover, grow and, importantly, create and maintain jobs lost in Ireland over the course of 2020.”

Restaurants Association of Ireland CEO Adrian Cummins in a tweet this afternoon thanked government ministers for “listening to our calls for a sector specific approach” to the Budget. 

VAT reductions

Donohoe also announced that the VAT rate for the hospitality sector will be reduced from 13.5% to 9% from 1 November. This will remain in place until December 2021. 

VFI chief executive Padraig Cribben said this reduction is a “welcome development” for the sector. 

“At present it’s of little use to most hospitality businesses but hopefully they can avail of the full benefit in 2021,” Cribben said. 

He added: “While Budget 2021 is a positive start, the future remains extremely uncertain and it’s only when the end of the pandemic is in sight will we know if these measures have been enough.”

With reporting by Garreth MacNamee

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