Hotels group slams 'guillotining' of capital allowance schemes

The Irish Hotels Federation (IHF) has criticised what it calls "the guillotining" of capital allowance schemes in today's Budget from the Minister for Finance’s Michael Noonan.

It did welcome the special allocation to be made for the national tourism ‘Gathering’ initiative in 2013 and acknowledged the significant benefit the reduced VAT rate of 9% has had for the hospitality sector.

Tim Fenn, Chief Executive, IHF, said: "The IHF expresses major concern at the guillotining of accelerated capital allowance schemes which will not now extend beyond the tax life of each particular scheme or 1 January 2015, whichever is later."

Mr Fenn said that this will cause significant and lasting damage to an already distressed hotel sector.

He said: "It will seriously erode the ability of hoteliers and their families to service existing borrowings in the situation where they do not have sufficient income to offset the allowances before the new deadlines. This change will exacerbate the problems of overhanging debt in the hotel sector.

He went on to say that the federation is fully behind 'The Gathering' initiative and look forward to working closely with Minister for Tourism Leo Varadkar, TD and the tourism agencies to ensure it is a tremendous success.

He said: "We appreciate Minister Noonan’s continued support of the tourism sector in relation to the jobs initiative and the valuable role that the reduced VAT rate has played in generating additional business for the hospitality industry."