Dublin coffee shop shutters due to 'broken system'

The cost of cutting Vat for food-led businesses alone would come to around €545m, according to Tax Strategy papers published earlier this year

On its Instagram page the business said the 'current trading environment is near impossible'.

Perch Coffee is among the hospitality businesses to shutter its doors permanently due to high costs, fuelling further pressure from lobbyists on Government to reduce Vat. 

The small coffee kiosk on Leeson Street is nestled in one of the capital’s most corporate areas, surrounded by offices including cloud-based customer service platform Zendesk, social media site LinkedIn, and professional services firm Morgan McKinley.

However, on its Instagram page the business said the “current trading environment is near impossible”.

“The numbers simply don’t add up and the system is broken,” the business said.

The closure comes as lobby group Restaurants Association of Ireland (RAI) has reiterated calls for Vat to be reduced for food-focused businesses as the Government faces into the final weeks of finalising the Budget.

The Government has not budged from its stance on the Vat rate and maintained that reducing it would be too costly.

The cost of cutting Vat for food-led businesses to alone would come to around €545m, according to Tax Strategy papers published earlier this year.

The RAI claimed there have been 577 food-led business closures since the hospitality Vat rate was increased from 9% to its pre-pandemic rate of 13.5%. In January alone, there were 101 closures recorded by the RAI.

A spokesperson for the RAI said the closure of Perch Coffee “follows the general trend of two restaurants, cafes, and other food-led businesses closing every day since the 50% increase in the Vat rate last September.” 

“As we leave the summer months behind and move into the hospitality sector’s quiet season, closures will only escalate,” they continued.