UK pub chain to cut food and drink prices for one day over VAT disparity
The pub giant, which has 794 establishments across the UK and Ireland, said it will drop prices by 7.5% for one day to show customers the potential impact of a VAT reduction for the sector
JD Wetherspoon will cut prices on its food and drink on Thursday to highlight a tax “disparity” between hospitality businesses and supermarkets.
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The pub giant, which has 794 establishments across the UK and Ireland, said it will drop prices by 7.5% for one day to show customers the potential impact of a VAT reduction for the sector.
Tim Martin, founder and chairman of the company, said the current rules mean that pubs and restaurants are effectively “subsidise” supermarkets.
UK hospitality businesses - including pubs, restaurants, cafes and bars - have to pay 20% VAT on food and drink sales.
This was temporarily reduced during the Covid-19 pandemic but rose again from 12.5% to 20% in 2022.
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By contrast, 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."