As reported by The Herald,JD Wetherspoon will be slashing 7.5% off the price of food and drinks this Thursday, 15 September. It is doing so in order to demonstrate the extent to which a reduction in VAT tax can be beneficial for the hospitality sector. The price reduction would be done by Wetherspoon across all its around 850 pubs, in the UK.
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Wetherspoon to slash prices to mark Tax Equality Day
Wetherspoon’s latest move is in order to protest against the 20% VAT tax levied on pubs and restaurants. It drew comparisons with supermarkets which can sell food and drinks without having to pay anything extra.
The report quoted Tim Martin, Wetherspoon’s chairman who said:
Taxes should be fair and equitable. It doesn’t make sense for the hospitality industry to subsidise supermarkets.
However, it is unfair that supermarkets pay zero VAT on food, but pubs and restaurants pay 20 per cent. Pubs have been under fantastic pressure for decades due to the tax disadvantages that they have with supermarkets.
VAT on the hospitality sector
During the Covid-19 crisis, VAT was brought down to 5% and then again to 12.5%. But with the hospitality industry in the UK once again having to tighten its purse strings amidst the cost-of-living crisis, pubs and restaurants are requesting the government to put in place a permanent reduction in VAT.
The Chairman further stated,
We applauded the Chancellor when he reduced the level of VAT to five per cent and then to 12.5 per cent (for food and drink served in pubs) and urge the Chancellor once again to reduce VAT, thereby creating tax equality between pubs and supermarkets.
He should also note that the main impact of tax inequality is on high streets and town and city centres, which heavily depend on a diversity of prosperous hospitality businesses for economic, social and employment success.
Sources:
- The Herald: 'Pub giant JD Wetherspoon to slash prices on Thursday'
- The Guardian: 'More than 70% of pubs do not expect to survive winter as energy costs soar'
Read more:
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⋙ Living costs are rising: Truss and Sunak propose tax plans that could affect you very differently
