Brexit and a no-deal scenario still a major concern for West Cork firms

October 8th, 2019 10:53 AM

By Brian Moore

Minister Paschal Donohoe: ruled out a supplementary budget but what else might he be planning? (Photo: Shutterstock)

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FOR businesses in West Cork, Budget 2020, which finance Minister Paschal Donohoe will deliver to the nation today, is of critical importance.

FOR businesses in West Cork, Budget 2020, which finance Minister Paschal Donohoe will deliver to the nation today (Wednesday October 8th), is of critical importance.

The wishlist is long, with tax cuts and cash for rural infrastructure, health and education topping the bill.

But now the dark clouds of Brexit are looming over the region, which saw a major drop in UK tourists this summer.

Indeed, many business and political leaders had called for a supplementary budget if the UK leave the EU with no-deal in place, although Minister Donohoe has ruled that out. 

But that doesn’t quell the fears of local businesses, many linked to the tourism industry, who are now wondering how they will fare over the next 12 months.



TOURISM is an extremely important sector in West Cork and at Actons Hotel in Kinsale, sales and marketing manager Amy Buttimer and office manager Fidelma McCarthy both believe the hospitality VAT rate of 13.5% must be reduced back to 9%.

‘The increase is now hitting the industry and we are getting feedback from our customers and tour agents that our rates are too high,’ Fidelma said.

‘This year has seen a drop in the number of UK visitors to Kinsale and with the uncertainty with Brexit, we are very concerned. The VAT rate needs to be reduced as we have been told that we are becoming too expensive for visitors.

‘Also the government needs to put a strong message out that Ireland is not leaving the EU,’ Amy said.

‘For many visitors from the US they are reluctant to travel here because they feel the uncertainty surrounding Brexit. We have to let everyone know that it’s business as usual as far as the tourism sector in West Cork is concerned.’    

For accountant, Cormac Fitzgerald of Fitzgerald and Partners, his main concern is that the government ensures that Ireland is competitive, no matter with the Brexit outcome produces.

‘This year the Budget will be shaped to ensure the economy is protected in the aftermath of Brexit, regardless of what form Brexit may take. We are doing a lot of work with SMEs in helping them prepare for Brexit,’ he said.

‘From a personal tax perspective, the headline tax rate of 52% continues to be a talking point. However, given that the focus is now on a no-deal Brexit budget, the Minister has already announced that personal tax cuts will be minimal and focused. These changes are unlikely to apply broadly and will have little impact for individuals. 

‘For employers, they’re already facing increasing costs with PRSI rates increasing to 11.05% from January 2020.  However, in light of this particular Budget, perhaps the Minister should pause this,’ Cormac continued.

‘For employers attracting employees to Ireland, a special relief programme (SARP) which is an incentive for people moving to Ireland is due to end next year.

 ‘I would hope that the Minister would announce an extension for this particular relief. While the announcements on Budget day are likely to be minimal, we do hope the government does keep the personal tax regime on their agenda post-Brexit, to ensure that we have a competitive regime to attract to Ireland.’

Cormac feels that major budget changes for the business sector are unlikely.

‘With so much focus on Brexit and the pressure facing Irish businesses, it will be interesting to see whether the minister chooses to support Irish business through maybe changes to CGT relief or entrepreneur relief. 

‘It would be good to see entrepreneurs and the SME sector supported which form the engine of the Irish economy and the lifeblood of all rural towns and villages,’ Cormac said.

‘I think from a wider business tax perspective, any changes that we hear on Budget day or indeed coming through the Finance Bill have been well flagged and indeed consulted upon.  So it appears that the outlook is challenging but positive and the main focus now is to help business prepare and plan for the impact of Brexit.’



THE motor trade is another sector that is facing uncertain times ahead and at Nyhan Motors, manager Don McCarthy is concerned that the budget will include an increase to the tax bands on new cars.

‘This is a huge concern,’ Don said. ‘We have been preparing, as much as we can, for a no-deal Brexit but the industry is facing a major change over the next decade and while we are all in favour of going electric, the government must ensure that the infrastructure, reliable charging points and all that goes with the change from petrol and diesel must be in place, especially in rural West Cork.’

He added: ‘And while the infrastructure is being put in place, we must keep our petrol and diesel customers happy as well, so that they are encouraged to replace their old cars with more efficient vehicles, with even more reduced emissions.’



MAYOR of Clonakilty, Michael O’Neill of Fernhill House Hotel, wants Budget 2020 to provide opportunities for businesses in rural West Cork.

‘The government is too focused on Dublin and the bigger urban centres,’ Michael said. ‘Rural infrastructure must be improved and I think there needs to be more funds allocated to improving our road network thus ensuring that businesses, employers and employees can reliably operate in West Cork.

‘The VAT rate needs to be reduced, tourism is very cost sensitive and hiking the VAT rate has made us more expensive than our competitors across the EU.’



AS Brexit looms, Aodh O’Donnell of O’Donnell Furniture, wants extra support in the Budget to help companies exporting to the UK.

‘We export 80% of our production to the UK and while we have prepared to the best of our ability for whatever Brexit brings, the government must ensure that companies such as ourselves are supported, no matter what the outcome after October 31st,’ Aodh said.

However, he’s not convinced a supplementary Budget would be needed. ‘Even at this stage we don’t know what the real impact of a no-deal Brexit will be and if this is what happens, I think the government will need to react to the reality of the situation at the time. The main point is that the Budget protects our economy for the future.’



THE coach hire sector in West Cork is another sector which wants the government to earmark funds for in the Budget to improve the condition of our roads.

Mick Cremin of Cremin Coaches in Bantry wants the government to reinstate the VAT refund scheme on fuel and repairs for commercial vehicles.

‘The road system in West Cork, especially the more rural areas, is not fit for purpose,’ Mick said. ‘With the damage that is being done to buses and other vehicles it is becoming more and more expensive to keep coaches on the road and to provide a much-needed transport alternative.

‘For the safety of our passengers more needs to be done to repair and improved the road conditions. 

Tourism is very important to us and I would like to see more supports in the budget for landowners to ensure that their hedges and trees are cut and thus reducing the damage to trucks and buses that use the roads in West Cork.’

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