From today, 1 July 2026, the VAT rate on qualifying restaurant and catering services, including many cafés, restaurants, pubs serving food, takeaway food providers and catering businesses, has reduced from 13.5% to 9%. The reduced rate also applies to hairdressing services.

This is welcome news for many businesses, providing an opportunity to improve margins, support investment and review pricing strategies. It also means businesses should ensure their accounting systems, invoicing and financial processes have been updated to reflect the new VAT rate.

Is Your Business Ready?

Before the new rate comes into effect, businesses should review several key areas:

• Update EPOS and accounting systems to apply the correct VAT rate.
• Review menus, price lists and online ordering platforms.
• Ensure invoices and receipts reflect the new rate.
• Check that finance and payroll teams understand the change.
• Communicate any pricing updates clearly to customers where appropriate.

Taking these steps early can help avoid errors and ensure a smooth transition.

An Opportunity to Review Your Pricing Strategy

The reduction in VAT also provides an opportunity to review your wider commercial strategy.

Some businesses may choose to pass the saving on to customers, while others may use it to offset rising operating costs, invest in their business or strengthen profitability.

The right approach will depend on your business model, market position and long-term objectives.

Don’t Overlook the Bigger Picture

While the VAT reduction is positive news, it should form part of a broader financial review.

Now is an ideal time to assess cash flow, forecast the impact on profitability and ensure your business is well positioned for the remainder of 2026.

Businesses that combine tax planning with strong financial management are often best placed to take advantage of opportunities as they arise.

How Gallagher Keane Can Help

At Gallagher Keane, we work with hospitality businesses across Ireland to provide proactive tax advice, financial planning and strategic business support.

If you have questions about the VAT rate change or would like advice on how it could affect your business, contact Gallagher Keane today. Our team is here to help you make the most of this positive change.

Email: info@gallagherkeane.ie