The Northern Irish Minister for Enterprise has vowed to lobby on behalf of hospitality business owners to get VAT reduced to a similar rate as in the Republic.
Minister Jonathan Bell told the British Hospitality Association Summit that a cut in the VAT rate "would result in increased demand , which would in turn boost recruitment, investment and expansion right across the UK".
VAT stands at 20 per cent for businesses throughout the UK, compared to just nine per cent in the Republic of Ireland, a special rate that was introduced in 2011 in a bid to boost the sector.
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Restaurateur Bob McCoubrey told the Belfast Telegraph that businesses in Northern Ireland are struggling to compete with those in the South, who are benefitting from the low rate.
"It's crucial for over the next couple of years. At the minute, a sixth of everything in your till goes to the Vatman, regardless of whether you make a profit. It has cut our margins down," he said.
The different VAT rates adds to the struggle that Northern Irish hospitality businesses have faced recently with drifting currency values.