Pub giant JD Wetherspoon will slash food and drink prices for one day this week to highlight a tax « disparity » between hospitality businesses and supermarkets. The pub chain, which operates 794 pubs in the UK and Ireland, will lower food and drink prices by 7.5% on Thursday, September 18.
The change will see a customer spending £10 on food and drinks only pay £9.25. Wetherspoons said the reduction aims to show the Government and customers the potential impact of a VAT reduction on the sector. Tim Martin, founder and chairman of the chain, said that current rules mean that pubs and restaurants « subsidise » supermarkets. 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. »
Currently, UK hospitality businesses, including pubs, restaurants, cafes and bars, have to pay 20% VAT on food and drink sales.
This was reduced to 12.5% during the Covid-19 pandemic but increased to the original rate of 20% in 2022.
However, most food and drink sold by supermarkets to be consumed at home incurs no VAT.
Mr Martin continued: “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, 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. »
Chancellor Rachel Reeves will announce the autumn Budget on Wednesday, November 26.
