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Wetherspoon reduces prices after Chancellor's hospitality VAT cut
13 July 2020, 11:34
Pub firm Wetherspoon will reduce prices on drinks and meals in the wake of the Chancellor's decision to cut VAT due to coronavirus.
The pub chain said it would fully pass on the 15 per cent cut in VAT to their customers from Wednesday and has even produced posters praising the Chancellor.
Messages including Sunak's Specials and Dishi Rishi will be displayed alongside details of lower prices on some drinks and food including real ale, coffee, soft drinks, and breakfasts.
The chairman Tim Martin said: "Wetherspoon has campaigned for tax equality between pubs, restaurants and supermarkets for many years.
"Supermarkets pay no VAT on food sales and pubs pay 20 per cent."
The boss of the cheap pub chain said: "Supermarkets pay about two pence per pint of business rates and pubs pay about 20 pence.
"These tax differences have helped supermarkets to subsidise their selling prices of beer, wine and spirits, enabling them to capture about half of pubs' beer sales, for example, in the past forty years.
"A VAT reduction will help pubs and restaurants reverse this trend - creating more jobs, helping high streets and eventually generating more tax income for the Government.
"Not every UK hospitality business will be able to reduce prices immediately.
"Some will need to retain the benefit of lower VAT just to stay in business. Others may need to invest in upgrading their premises.
"However, lower VAT and tax equality will eventually lead to lower prices, more employment, busier high streets and more taxes for the Government."
VAT to be cut to 5% for hospitality businesses
Chancellor Rishi Sunak slashed VAT on food, accommodation and attractions from 20 per cent to 5 per cent, a tax cut worth up to £4 billion, as part of the radical new plans announced on Wednesday.
He also revealed an "eat out to help out" plan for dining out in August to boost the hospitality sector, with a 50 per cent discount per head from Monday to Wednesday up to a maximum discount of £10 per diner.
The Chancellor said he wants to see pubs, restaurants, cafes and B&Bs "bustling again", telling MPs: "At the moment, VAT on hospitality and tourism is charged at 20 per cent."So I've decided, for the next six months, to cut VAT on food, accommodation and attractions."