Reduced VAT rate for food and hospitality will provide major boost to seasonal workers – FRS Recruitment

FRS Recruitment has welcomed the reduction of the VAT rate to 9% from July next year for the hospitality sector

The reduced VAT rate will provide an important cashflow boost to many businesses in the hospitality sector and support employment for temporary and seasonal workers across the country.

As one of Ireland’s leading recruitment agencies, FRS Recruitment welcomes the announcement that the VAT rate for the food and hospitality sector will be reduced to 9% from July 2026.

The new measure was announced by Paschal Donohoe, Minister for Finance, as part of Budget 2026.

The reduction from the current 13.5% VAT rate will provide an important cashflow boost to a large cohort of Irish small and medium-sized enterprises (SMEs), which are important employers of seasonal and temporary workers in Ireland at peak times.

The hospitality sector is one of the largest employers of temporary staff in Ireland, particularly in rural and tourism-driven communities.

The 9% rate was previously introduced as a temporary measure during the Covid-19 pandemic, before being restored to its original level in September 2023.

Lynne McCormack, General Manager at FRS Recruitment, said:

“Temporary workers are a crucial part of Ireland’s economy, and this new measure could help give many Irish SME’s the financial security to boost their workforces. Specifically in the hospitality sector, businesses have struggled in recent years to retain seasonal workers for their busiest times of the year. This VAT reduction is more than a financial adjustment, it's a catalyst for job creation and business confidence.

“FRS Recruitment will continue to support this sector and its employers with a ‘talent solutions’ offering, which includes temporary workers. WrkWrk is also a company under the FRS umbrella which has an on-demand staffing platform works primarily in the hospitality sector. Ireland has the people that are willing to work, and this reduction in the VAT rate will help more jobs become available to them.”