The pub chain said it would reduce prices on food and drink
Pub behemoth JD Wetherspoon has announced plans to slash prices on its food and drink for a single day this week, in an effort to spotlight the tax “disparity” between hospitality businesses and supermarkets. The firm, which operates 794 pubs across the UK and Ireland, will reduce food and drink prices by 7.5% on Thursday, September 18.
Wetherspoons is using this price cut to demonstrate to the Government and its customers the potential impact of a VAT reduction for the sector. Tim Martin, founder and chairman of the chain, argued that under current regulations, pubs and restaurants effectively “subsidise” supermarkets.
At present, UK hospitality businesses, including pubs, restaurants, cafes and bars, are required to pay 20% VAT on food and drink sales. This was temporarily lowered during the Covid-19 pandemic, but rose from 12.5% back to the original rate of 20% in 2022.
However, most food and drink sold by supermarkets for home consumption is not subject to VAT.
Mr Martin said: “The biggest threat to pubs and the hospitality industry in general is the vast disparity in tax treatment among pubs, restaurants and supermarkets. 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. 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. We call on the chancellor to create tax equality.”
Kate Nicholls, the chairwoman of UKHospitality, said: “A reduced rate of hospitality VAT across the UK means lower prices and more jobs, leading to the regeneration of our high streets and communities.”