The move, dubbed “tax equality day” by Wetherspoon’s, is designed to highlight the benefit of a permanent VAT reduction for the struggling hospitality industry, the chain said
Wetherspoon is set to cut food and drink prices by 7.5% today as the pub chain makes a point about the impact of taxes on their business.
The chain has said the move, dubbed “tax equality day” by Wetherspoons, is designed to highlight the benefit of a permanent VAT reduction for the struggling hospitality industry.
Tax equality day is aimed at showing to customers the unfairness of how tax is levied on alcohol and food sold in pubs compared with when sold in shops.
The initiative will see customers saving 75p on every £10 spent in the chain’s pubs on September 18. The food and drinks sold in pubs are subject to 20% VAT, however supermarkets pay zero VAT on food.
Wetherspoons has claimed that grocers use that saving to sell alcohol to customers at a discounted price.
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During the pandemic, VAT rates for the hospitality sector were reduced in order to try and help struggling businesses stay afloat. VAT was lowered to 5% in July 2020, rising to 12.5% from October 2021 and March 2022.
Tim Martin, the founder and chairman of Wetherspoon’s, said: “The biggest threat to pubs and the hospitality industry in general is the vast disparity in tax treatment among pubs, restaurants and supermarkets.
“Supermarkets pay zero VAT in respect of food sales, whereas pubs, bars and restaurants pay 20%. This tax benefit allows supermarkets to subsidise the selling price of beer.
“Pubs have been under fantastic pressure for decades, because of the tax disadvantages which they have with supermarkets. It doesn’t make sense for pubs and the hospitality industry to subsidise supermarkets.
“A VAT cut to 12.5% is needed to ensure that pubs, bars and restaurants do not continue to close, but instead thrive, invest and create new jobs.
“Customers coming to Wetherspoon’s pubs on Thursday 18 September will find the price of their food and drinks to be lower than normal. We call on the chancellor to create tax equality.”
Three of the biggest hospitality organisations, UKHospitality, British Beer and Pub Association and the Campaign for Real Ale (CAMRA), have all lent their baking to Mr Martin’s one day discount.