The 9% VAT Rate Returns How to Reinvest the Savings into Your Kitchen in 2026
What You Really Need to Know
Introduction
Good news doesn’t come around often in Irish hospitality. But when it does, you need to be ready.
Budget 2026 has confirmed it: From July 1st, 2026, VAT rate on food and catering services drops from 13.5% to 9%.
Restaurants Association of Ireland called it “a welcome and long-fought victory for our industry.”
But here’s the critical question: What are you going to do with the extra margin?
Because there are two types of hospitality businesses in Ireland right now:
- Those who’ll pocket the VAT difference and hope it covers rising costs
- Those who’ll reinvest strategically and come out of 2026 stronger
Which one are you?
Numbers What the VAT Cut Actually Means
Let’s talk real money.
Change:
VAT on food/catering: 13.5% → 9% (from July 1st, 2026)
What it means for pricing:
If you charge €10 for a main course:
- Old VAT (13.5%): Customer pays €11.35
- New VAT (9%): Customer pays €10.90
Difference: €0.45 per €10 item
Important note: Accommodation VAT stays at 13.5%. This applies to food service, restaurants, cafés, catering, and hairdressing only.
Quick Calculator Your Potential Savings
Example 1: Small Café
- Average daily food/drink revenue: €1,000
- Days open per month: 25
- Monthly revenue: €25,000
Extra margin from VAT cut (assuming prices stay the same):
€25,000 × 4.5% = €1,125 per month
€1,125 × 12 months = €13,500 per year
Example 2: Mid-Sized Restaurant
- Average daily food revenue: €3,000
- Days open per month: 26
- Monthly revenue: €78,000
Extra margin:
€78,000 × 4.5% = €3,510 per month
€3,510 × 12 months (assuming July start) = €21,060 per year (6 months in 2026, then full year ongoing)
Example 3: Busy Canteen/Catering Operation
- Average daily revenue: €5,000
- Days open per month: 22
- Monthly revenue: €110,000
Extra margin:
€110,000 × 4.5% = €4,950 per month
€4,950 × 12 months = €59,400 per year
That’s not pocket change. That’s strategic investment capital.
Trap Why “Pocketing the Difference” Won’t Save You
You’re thinking: “Finally, some breathing room. I’ll use this to cover rising costs.”
Here’s the problem: rising costs never stop.
- Wages: Increasing in January 2026 (living wage, NMW increases)
- Energy: Still volatile
- Food costs: Ongoing inflation
- Insurance: Rising year-on-year
- Rent: Trending upward in urban areas
If you use the VAT savings to simply absorb costs, you’re back in the same position in 12 months. You’ve gained nothing. You’ve just delayed the inevitable.
In reality, smarter play: A smarter play is to invest the savings into things that reduce your long-term costs or increase your capability.
Strategy 1: Upgrade Equipment That Saves Money Long-Term
Instead, right equipment doesn’t just make life easier. It makes your business more profitable.
Blast Chiller Case Study
What it does:
Rapidly chills cooked food from 70°C to 3°C in 90 minutes, safely preserving quality and extending shelf life.
The business case:
According to Electrolux Professional, blast chillers can reduce food waste by up to 35%.
Your current food waste:
If you’re throwing away €500/week in spoiled food, over-prepped ingredients, or trimmings that go bad:
- €500 × 52 weeks = €26,000 annual waste
With 35% reduction:
- €26,000 × 0.35 = €9,100 saved per year
Blast chiller cost:
Entry-level commercial unit: €3,000-€6,000
Mid-range: €6,000-€12,000
Payback period:
€6,000 investment ÷ €9,100 savings = 8 months
After 8 months, you’re making money. Year after year.
Additional benefits:
- Cook in advance during quiet periods (batch cooking efficiency)
- Safely store prepared components (mise en place for service)
- Reduce reliance on “use it or bin it” mentality
- Extend menu flexibility (prep more variety without waste risk)
- HACCP compliance (safe rapid cooling for food safety)
Other Smart Equipment Investments
Commercial Sous Vide System (Immersion Circulators + Vacuum Sealer):
- Cost: €1,500-€4,000
- Benefit: Precise cooking, zero waste from overcooking, prep days ahead
- Typical waste reduction: 10-15%
- Payback: 6-12 months
Energy-Efficient Ovens/Fryers:
- Cost: €3,000-€15,000 (depending on type)
- Benefit: 20-40% energy savings compared to old equipment
- Payback: 2-4 years (but energy costs keep rising, so real savings grow)
Dishwasher with Heat Recovery:
- Cost: €8,000-€15,000
- Benefit: 30-50% energy savings on hot water
- Payback: 3-5 years
Inventory Management System (Software + Scales):
- Cost: €100-€500/month SaaS
- Benefit: 10-25% reduction in over-ordering and spoilage
- Payback: Often immediate
Pattern:
All these investments use your VAT savings to reduce recurring costs. Once paid off, they keep saving you money year after year.
Strategy 2: Invest in Staff Training to Solve the Recruitment Crisis
Here’s the harsh reality of Irish hospitality in 2026:
The recruitment crisis hasn’t gone away.
- Good chefs are hard to find
- When you find them, competitors poach them
- Training new staff is expensive
- High turnover kills consistency and morale
Instead, traditional response: Keep hiring, keep losing people, keep starting over.
In reality, smarter response: Upskill the people you already have.
Crucially, Commis to Chef de Partie (CDP) Strategy
Problem:
You have a decent Commis Chef earning €30,000-€32,000. They’re keen, they show up, they’re reliable. But they’re not confident enough to run a section yet.
You need a CDP, but hiring one externally costs €38,000-€42,000+, and there’s no guarantee they’ll stay or fit your kitchen.
Solution:
Invest €1,000-€2,000 in professional training to upskill your Commis to CDP level.
ROI calculation:
Option A: Hire External CDP
- Salary: €40,000
- Recruitment costs: €1,000-€3,000 (job ads, agency fees, trial shifts)
- Risk: They leave after 6 months (high in current market)
- Total year 1 cost: €41,000-€43,000
Option B: Upskill Internal Commis
- Current salary: €31,000
- Training investment: €1,500
- Modest pay rise post-qualification: €3,000 (to €34,000)
- Total year 1 cost: €35,500
- Savings: €5,500-€7,500
But the real value isn’t just financial.
Intangible benefits:
- Loyalty: Staff you invest in stay longer (they feel valued, they have a career path)
- Culture: Other staff see there’s progression available
- Consistency: Internal promotions maintain your kitchen’s standards and systems
- Morale: Nothing kills a team faster than watching talented colleagues leave for development opportunities elsewhere
- Recruitment magnet: Word spreads that you actually develop your team
Crucially, data backs this up:
Hospitality businesses with structured training programmes report 30-50% lower turnover than those without.
If replacing a chef costs €8,000-€12,000 (recruitment + lost productivity + training time), preventing just one departure per year pays for multiple staff training courses.
Beyond Chef Training The Whole Team
Don’t limit training to chefs. Every role benefits.
For Front-of-House:
- Customer service training
- Wine/beverage knowledge
- Upselling techniques (done right, can increase average spend by 10-15%)
- Allergen awareness training (legal requirement, prevents liability)
For Kitchen Porters & Cleaners:
- Food safety & hygiene Level 1 (prevents contamination, reduces waste from spoilage)
- Manual handling (reduces injury and sick leave)
For Supervisors:
- HACCP Level 2 (enables them to manage food safety systems, prevents costly mistakes)
Instead, pattern again:
Spend €500-€2,000 per person on training. Get back 10x that in reduced turnover, improved performance, fewer mistakes, and higher morale.
Your VAT savings can train 5-10 staff members in year one. The ROI compounds every year they stay.
Strategy 3: Fix the Things You’ve Been “Managing”
You know that oven that doesn’t heat evenly? The walk-in fridge that’s “fine as long as you don’t open it too much”? The dishwasher that takes three cycles to get plates clean?
You’ve been “managing” these problems for months (or years). They cost you money every single day.
Oven: Wastes gas, wastes time, produces inconsistent results
Fridge: Runs inefficiently, risks food safety failures, stresses out during busy service
Dishwasher: Wastes water, wastes staff time, frustrates the team
Instead, VAT savings give you a budget to fix these problems.
Example: Dodgy Walk-In Fridge
Current situation:
- Running constantly (compressor working overtime)
- Temperature fluctuates between 2°C and 8°C
- You’re nervous every time EHOs visit
- Door seal is damaged (you stuff towels in the gap)
Cost of “managing”:
- Extra energy consumption: €150-€300/month
- Potential food safety failure: Risk of closure or enforcement action
- Stress and time spent worrying: Immeasurable
Fix it properly:
- New door seal: €200-€400
- Compressor service/repair: €500-€1,500
- Or replace unit entirely: €5,000-€15,000 (depending on size)
With VAT savings:
Even the café with €1,125/month extra margin can afford a repair in month 1, or save up for a replacement over 3-6 months.
After the fix:
- Lower energy bills (ongoing savings)
- No more food safety anxiety
- Equipment that actually supports your operation instead of fighting it
ROI here isn’t just financial it’s peace of mind.
“But I Need the Money Now” Objection
You’re thinking: “This all sounds great, but my costs are going up in January. I need that VAT margin just to stay afloat.”
Fair concern. Let’s address it.
In reality:
In that scenario, your business model is broken with the VAT cut absorbing immediate costs, your business model is broken.
However, the VAT cut isn’t a solution. Instead, the opportunity lies in reinvestment. It’s a window of opportunity to fix structural problems.
Crucially, hard truth:
If you use the VAT savings to cover costs in 2026, what happens in 2027 when:
- Over time, wages will go up again (they always do)
- Energy prices spike again (they’re cyclical)
- Food costs rise again (inflation doesn’t stop)
You’ll be back where you started, but with no more VAT cuts coming to save you.
Instead, alternative:
Use the first 6 months of VAT savings (July-December 2026) to invest in things that structurally reduce your ongoing costs:
- Blast chiller → Cuts food waste by 35% → Saves €9,000+/year forever
- Staff training → Cuts turnover → Saves €8,000-€12,000 per prevented departure
- Equipment repairs → Cuts energy waste → Saves €1,800-€3,600/year ongoing
By January 2027, you’ve got:
- Lower recurring costs
- More capable staff
- Equipment that works for you, not against you
You’re structurally stronger. Not just temporarily patched up.
Timeline What to Do When
Now (December 2025 – June 2026):
✅ Calculate your VAT savings
Work out exactly how much extra margin you’ll have from July onwards.
✅ Audit your biggest cost problems
Where are you hemorrhaging money? Food waste? Staff turnover? Energy bills?
✅ Prioritise investments
What will give you the biggest ROI? What’s urgent vs. important?
✅ Get quotes
Equipment suppliers, training providers, repair technicians. Know your costs.
✅ Plan staff training
Identify who needs upskilling, what qualifications would help, when to schedule it.
July 2026 (VAT Cut Goes Live):
✅ Don’t change prices immediately (if you can afford not to)
Keep prices the same, capture the full 4.5% margin increase.
✅ Start your first investment
Month 1: Order the blast chiller, or book staff training, or fix the fridge.
✅ Track the savings
Document exactly how much extra margin you’re capturing. Most businesses underestimate it.
July – December 2026:
✅ Execute your investment plan
Use the 6 months of savings to fund equipment, training, repairs.
✅ Measure the impact
Are you reducing food waste? Has turnover decreased? Are energy bills lower?
✅ Reinforce the cycle
As investments start paying off, reinvest the savings into the next priority.
2027 and Beyond:
✅ Harvest the compound benefits
Lower costs, better staff retention, more reliable equipment.
✅ Stay competitive
While competitors are still “managing” problems, you’re operating efficiently.
✅ Plan the next phase
What’s the next investment that will drive costs down or revenue up?
Acorn Star Training Investment Strategy
Let’s talk specifically about investing your VAT savings in staff development.
In reality, most owners face:
Training feels like an expense, not an investment. You pay for a course, the staff member gets qualified, then they leave for a better job elsewhere.
Why that happens:
Because training alone isn’t retention. Career progression is retention.
Instead, smart approach:
- Train with a plan
Don’t send people on random courses. Create a clear progression pathway. “You’re a Commis now. Complete Level 2 HACCP training, and in 6 months we’ll move you to CDP with a pay rise.”
- Make it visible
Other staff see that progression is possible. That you invest in people. That staying = growth. - Link training to responsibility
“Once you’re qualified, you’ll manage the cold section.” Training + responsibility + recognition = loyalty. - Celebrate qualifications
Certificate on the wall. Team announcement. Pay rise. Make it matter.
Training as competitive advantage:
In a tight labour market, development opportunities are a recruitment tool.
When you advertise: “We invest in our team all staff complete professional qualifications and we support career progression” you attract better candidates.
When competitors offer €2,000 more salary but no development, your staff stay because they’re building a career, not just earning a wage.
Recommended Training Investments from VAT Savings
For Kitchen Teams:
- Food Safety & HACCP Level 1 – All kitchen staff (porters, commis, chefs). Essential food safety knowledge. Cost: ~€100-200/person
- HACCP Level 2 – Chefs de Partie, Sous Chefs. Enables them to manage food safety systems. Cost: ~€200-400/person
- Level 3 Food Safety Management – Head Chefs, Kitchen Managers. Advanced HACCP, shelf-life validation, compliance management. Cost: ~€400-800/person
For Front-of-House:
- Allergen Awareness – All FOH staff. Legal requirement, prevents costly lawsuits. Cost: ~€50-150/person
For All Staff:
- Manual Handling – Reduces injury and sick leave. Cost: ~€50-100/person
- Control of Chemicals – Safe use of cleaning products. Prevents accidents. Cost: ~€50-100/person
ROI example:
Train 10 staff members (mix of levels): €2,000-€3,000
Prevent one chef departure: Save €10,000
Prevent one allergen lawsuit: Save €15,000-€50,000
Reduce food waste through better HACCP compliance: Save €5,000+/year
Total ROI: 500-2,000%
Your €1,125/month VAT savings? That trains 15-20 staff members per year. Fully.
Why This Matters More Than You Think
In reality, Irish hospitality sector has been through hell.
COVID closures. Energy crisis. Staff shortages. Rising costs. Customer expectations higher than ever.
Budget 2026’s VAT cut isn’t a solution to all that. But it’s an opportunity.
An opportunity to stop firefighting and start building.
Instead, businesses that will thrive in 2027-2030 are the ones that use this VAT window to:
- Eliminate structural inefficiencies
- Build capable, loyal teams
- Invest in equipment that reduces long-term costs
Crucially, businesses that will struggle are the ones that treat the VAT cut as temporary relief and change nothing.
Which one will you be?
Strengthen Your Food Safety Knowledge
Using your VAT savings to train your team isn’t just smart business it’s long-term investment in capability, compliance, and retention. Our courses provide professional qualifications that advance careers and strengthen operations:
For Kitchen Teams:
- Food Safety & HACCP Level 1 – Essential for all kitchen staff (chefs, commis, porters). Covers hygiene, temperature control, contamination prevention, and HACCP basics. The foundation every food handler needs.
For Supervisors & Chefs de Partie:
- HACCP Level 2 Training – For staff managing sections or supervising others. Covers HACCP implementation, hazard analysis, critical control points, and food safety management systems. Positions them for progression to senior roles.
For Head Chefs & Kitchen Managers:
- Level 3 Food Safety & HACCP Management – Advanced qualification covering shelf-life validation, microbiological risk assessment, audit preparation, and regulatory compliance. For those leading kitchen operations and ensuring full FSAI compliance.
For Front-of-House Teams:
- Allergen Awareness – Essential for all customer-facing staff. Covers the 14 major allergens, customer communication, cross-contamination prevention, and legal requirements. Prevents costly allergen incidents and lawsuits.
For All Staff (Operational Safety):
- Manual Handling – Reduces back injuries and sick leave. Proper lifting techniques and risk assessment.
- Control of Chemicals – Safe use of cleaning and sanitizing products. Prevents accidents and ensures compliance.
Free Learning Management System for Business Users:
For businesses training 10 or more employees, we provide a free Learning Management System (LMS) – a professional online platform that helps you manage, track, and prove your team’s food safety compliance.
What our LMS does for you:
- Track who’s trained: See at a glance which staff have completed which courses
- Manage certifications: Monitor expiry dates and schedule renewals automatically
- Prove compliance: Generate instant reports for FSAI inspections showing full training records
- Store documentation: Keep all training certificates and HACCP records in one secure location
- Assign training: Easily enrol new staff or assign refresher courses as needed
When Environmental Health Officers arrive for an inspection and ask to see training records, you can pull up complete documentation in seconds. No more scrambling through filing cabinets or email archives.
The LMS is completely free for businesses using our training courses with 10+ employees. It’s our way of supporting Irish food businesses to stay compliant, organized, and inspection-ready.
Ready to invest your VAT savings wisely? Start with Level 1 Food Safety training for your entire kitchen team. For comprehensive training solutions, visit Acorn Star.
You’re still on your break. You have 5 minutes. Do this before you go back to service:
Right now (on your phone):
- Check your last pest control report – read it properly
- Check your training records – who hasn’t done food safety training?
- Make a note of every gap, hole, or broken seal you know about
- Check when door seals were last replaced
Tomorrow: 5. Walk to Goods Inwards and actually look at it with fresh eyes 6. Take photos of problem areas 7. Ask your porter/delivery staff what issues they see daily
This week: 8. Book door seal repairs if needed 9. Implement immediate cardboard breakdown rule 10. Brief all staff on door discipline 11. Contact your pest control company if gaps were mentioned in reports
This month: 12. Get basic food safety training for porters and delivery staff 13. Add pest checks to opening/closing procedures 14. Fix all ingress points identified in last pest control report
