Eimear Killian’s phone is lighting up in the aftermath of the Budget 2026 announcement, with a much lighter and brighter tone of message than the previous two budgets.

This is because the VAT rate on hospitality will be reduced from 13.5 per cent to 9 per cent from July 2026.

For Killian, and her business partner Heather Connolly, who run a cafe and bakery in Spiddal, in south Connemara, a reinstatement of the rate brings relief, even if it won’t come into effect until next summer.

What is of concern, however, is the anticipated pressure they will face from January 1st, 2026, when the national minimum wage increases by 65 cents to €14.15 per hour.

“Probably about 40 per cent of our staff are paid from minimum wage, so they will all see wage increases. But this will have a ripple effect on all the other staff, because they will come looking for 5 per cent increase too.

“That’s not feasible for us and I am expecting these questions will come my way as a result of the budget changes.

“We’re also trying to find our way through auto-enrolment, which is mandatory from January 1st also, and how this will impact us and the costs involved too. We have a lot to wrap our heads around now.”

With an understanding of just how costly it can be to make ends meet these days, does she think the VAT reduction in hospitality will be passed on to customers?

“I really don’t know but it is something we will definitely look at. We have to wait and see what the cost of food is at that time, because let’s say if coffee – which has gone up by 35 per cent – increases