Pub giant JD Wetherspoon has said it will cut prices on its food and drink for just one day later this week, in order to highlight a tax “disparity” between hospitality businesses and supermarkets. The company, which runs 794 pubs in the UK and Ireland, said it will drop food and drink prices by 7.5% on Thursday, September 18.
Wetherspoons said the reduction is to show the Government and customers the potential impact of a VAT reduction for the sector. Tim Martin, founder and chairman of the chain, said that current rules mean that pubs and restaurants “subsidise” supermarkets.
Currently, UK hospitality businesses, including pubs, restaurants, cafes and bars, have to pay 20% VAT on food and drink sales. This was reduced during the Covid-19 pandemic, but increased from 12.5% 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 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, 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.”
