Pub giant JD Wetherspoon will make a huge cut to its prices next week in a bid to highlight what it describes as the benefit of a permanent VAT reduction in the hospitality industry.
The London-listed giant, which has sites across the country, will be reducing the price of its food and drink by 7.5 per cent on Thursday, 12 September.
The company said its prices will be cut for one day only to mark ‘Tax Equality Day’. Wetherspoon added that in Scotland prices will be reduced on food and non-alcoholic drinks only in order to keep in line with devolved licensing laws.
Wetherspoon, which is led by founder Sir Tim Martin, added that a customer spending £10 on food and drinks will pay only £9.25 on ‘Tax Equality Day’.
All food and drinks in pubs are currently subject to 20 per cent VAT. In comparison, supermarkets pay zero VAT on food and are able to use that saving to sell alcohol to customers at a discounted price.
Disparity in tax is biggest threat to pubs – Wetherspoon boss
Sir Tim 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 per cent.
“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 per cent 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 12 September will find the price of their food and drinks to be lower than normal.
“We call on the chancellor to create tax equality.”