Yoga studios call for government to reduce VAT rate to save industry
Yoga studio owners are calling for the government to re-categorise their VAT rate in a bid to save yoga from disappearing from Ireland forever. Such studios currently pay 13.5% in VAT. However, gyms have availed of the lower 9% VAT rate since 2011.
The Association of Irish Yoga Studios has recently formed to call attention to the VAT issue using the slogan: 'Cut the VAT to get back on the mat!'.
"We believe the higher VAT rate for individual service providers has been erroneously applied to yoga studios, which are businesses that have fixed overheads, running purpose-designed facilities with associated costs, rates, insurance and staff wages," the Association said in a statement to the Irish Examiner.
Now, with talks of VAT rates being reduced for restaurants, hairdressers and other service providers, yogis fear they will miss out once again.
Dave Brocklebank of the Burren Yoga Retreat says years of paying the higher VAT rate, coupled with the new two-metre social distancing rules, will seriously affect the industry.
"At this stage, it is possible that the yoga studios in Ireland could close," he said.
"Most of us all started out as ordinary yoga teachers, teaching classes. But many of us have really developed and grown. We have become much more like business providers now. I've been in business in the Burren Yoga Retreat for 20 years.
"We have rented, bought and refurbished buildings. We have had them purposefully redesigned, involving a huge amount of money, with monthly outgoings.
"We have had to buy equipment, install ventilation and heating systems, so we are no longer like yoga teachers. But what's happening is we continue to be charged [VAT] like we are yoga teachers."
In 2011, the tourism and hospitality sector, hairdressing studios and gyms had their VAT lowered to 9%. However, yoga studios were never dealt with.
"As a result, during the recession, a lot of yoga studios went out of business, they just shut up," says Mr Brocklebank.
Yogis are hoping that the Minister for Finance will intervene in a bid to save their studios.
"We are completely aligned with providers of sports facilities and physical education [which can avail of the lower rate]. We fit into that category."
Mr Brocklebank says many people will lose their jobs if the studios go under.
"We are talking about all the yoga teachers we employ, the other staff, over 300,000 Irish people who come to yoga class to improve their mental health and well-being, especially under the current circumstances."
Social distancing is another major issue.
Mr Brocklebank spoke to a financial consultant who told him during the summer months when he provides week-long retreats in the Burren, with reduced numbers due to social distancing, he will be able to keep his head above water.
"In September when I go back to weekend retreats and run them every weekend at maximum capacity, according to social distancing, I am going to run at a loss.
"The Burren Yoga Retreat is opening its doors on July 10, we have put every measure in place to adhere to the guidelines... but in the back of my head I know if something doesn't change, we start running at a loss, haemorrhaging, even at full capacity in September."
Mr Brocklebank says the pandemic was a very stressful time for many, and a lot of people are depending on outlets like yoga to build up their resilience.
He says it is difficult to know whether reducing social distancing from two metres down to one is the right move, as the health and safety of students and staff is paramount.
"But the reality is if it doesn't reduce to one metre, we don't have a hope of surviving, even with a huge VAT rate reduction. We need both urgently."
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