Supports for business such as extending the 9% VAT rate for the hospitality sector could be extended in February, the Tánaiste has indicated.

Businesses are experiencing a range of challenges this winter, including skyrocketing energy bills, while an increase in the VAT rate in the new year looms large for the hospitality sector.

But Leo Varadkar said yesterday some support for businesses "would have to be extended". "In the new year, and certainly before the end of February, we will have to review the position because a lot of help that we are giving to businesses is due to end at the end of February. Whether it's the 9% VAT rate or the TBESS [Temporary Business Energy Support Scheme] for business, or the excise on petrol and diesel.

"I think everyone understands that we can't extend all of these things but at the same time with the cost of living so high, I think that some of them will have to be extended."

The TBESS was introduced to support businesses with increases in their energy costs. The Government has also slashed the amount of excise duty it claims on petrol and diesel. The 9% VAT rate for hospitality is due to rise to 13.5% at the end of February.

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The VAT rate cut has cost the State €600m, while the cut in the fuel excise rate has cost around €400m, with €1.25bn put aside for the TBESS scheme.

It is widely expected within Government circles that excess corporate tax receipts at the Department of Finance will be used, at least in part, early in the new year to help support businesses.

The chief executive officer of the Restaurants Association, Adrian Cummins, welcomed the signal from Mr Vardakar that the VAT rate would stay at 9%.

He said an increase in the rate would be the "nail in the coffin" for the sector, particularly coffee shops and restaurants which are most adversely affected.