Irish hospitality spending rose 6.17% in the three months after a similar VAT cut
Card machine provider Dojo has published research suggesting that a VAT cut for the UK hospitality sector, similar to one introduced in the Republic of Ireland, could unlock an additional £6.28 billion in annual spending for the industry. On 1st July 2026, the VAT rate for restaurant and catering services, hot takeaway food, hot tea and coffee, and hairdressing businesses in the Republic of Ireland was cut from 13.5% to 9%. The research comes as the UK’s hospitality sector continues to campaign for its own VAT cuts.
Dojo said the £6.28 billion figure was calculated by analysing average spend per customer across affected business types in the UK and Ireland between April and September 2026, comparing the three months before Ireland’s VAT cut with the three months after. These results were then compared against historical trends and scaled nationwide to estimate the potential boost to UK spending. Dojo’s analysis of anonymised customer spending data from hospitality businesses in the UK and Republic of Ireland estimates that introducing a similar VAT reduction could increase average monthly spending per customer from £57.37 to £59.85, an additional £2.48 per person.
According to Dojo, this could translate into an estimated £147.7 million in additional monthly spending for UK hospitality businesses using Dojo card machines alone, or £6.28 billion in gross revenue annually across the wider sector.
Dojo said hospitality businesses in the Republic of Ireland had two options following the VAT cut: keeping customer prices the same, meaning less of each payment goes towards VAT and more revenue is available to cover costs, or reducing customer prices and passing some or all of the savings on to customers. Dojo’s findings show that hospitality spending per customer across qualifying businesses in Ireland rose 6.17% in the three months following the VAT cut, compared with an increase of 1.85% in the UK over the same period, meaning Irish spending per customer grew more than three times as quickly as in the UK.
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Dojo noted that PWC has reported hospitality insolvencies are down 23% in the Republic of Ireland since the VAT cut. Dojo also said Ireland’s 6.17% spending growth between July and September 2026 was significantly higher than the typical summer growth rate of 3.9% recorded between July and September 2025, while UK spending over the same period stayed relatively flat with no significant year-on-year growth.
Charlie Ashworth, Head of Research and Insights at Dojo, said: “As the Autumn Budget approaches, we hope these insights will help to demonstrate the positive impact a VAT cut could have in helping to protect the UK’s hospitality sector and unlock its potential to thrive.”
Ashworth also said: “Hospitality is one of the few sectors in the UK that creates jobs in every community. Yet, in the last two years, nearly 100,000 have been lost as energy and food costs have risen, customers’ disposable income has declined, and policy choices have put the industry under huge financial pressure.” He added: “That’s why we’re proud to be backing the #VATsTheProblem campaign, as the UK’s hospitality sector and its supporters push for the changes it needs.”
