- Morning Advertiser >
- Forums >
- News Article Comments >
- Hope for VAT cut on pub food bills
News Article Comments : Hope for VAT cut on pub food bills
Europe has given pubs a glimmer of hope that VAT on food bills for customers could be cut.
The European Commission proposes giving member states the right to permanently reduce VAT on certain services, including the supply of restaurants and catering services, to as low as 5%.
The aim is to help local and labour-intensive services provided by small businesses.
The move would soften the blow for licensees of rising food inflation, currently 13.7% year-on-year according to the consumer price index.
Some states can already have VAT reduced for food bills for limited periods until 2010 and the EC wants this expanded.
EC commissioner Laszlo Kovacs said: “There is no reason why restaurant services should be allowed to benefit from a reduced rate in half of the European Union, but not in the other half.”
Ed Turner, operations director at food-led operator Geronimo Inns, said: “The problem with food inflation is that at the moment costs are going up while everyone’s personal income is go
| Author Name | Opinion | Reply |
|---|---|---|
George Baker 28/08/2008 15:52:22  |
RE: Hope for VAT cut on pub food bills This raises some interesting and complex issues. The presence of VAT at any rate has no impact (positive or negative) on a pub's profitability. If the EU suggestion is that food when sold in a restaurant/pub attracts a lower rate than present, then of course this would offer the retailer the opportunity of lowering his prices (thereby attracting more customers) or maintaining his existing prices - and making more GP. But VAT currently relates to the commodities sold - not the type of outlet they are sold in. This would seem to be a major legislative change so I think there is a ready-made excuse for it not to be adopted. I can't see any Government volunteering to sacrifice a lucrative tax income. If this miracle were to happen I can see an awful lot of pubs filing accounts and VAT returns showing a sales split of 95% food, 5% wet! You saw it here first! edited by: George Baker at: 28/08/2008 15:52:39 This post replies to this thread |
|
David Pott 28/08/2008 19:30:41 |
RE: Hope for VAT cut on pub food bills Spain has had different rates of IVA (VAT) in bars and resturants since it was introduced there. The lowest rate was something like 4% which included the majority of bars and resturants. Next was about 8% which inluded the more select and 33% for the top end of the market. As VAT is only a tax which we collect as unpaid tax collectors for HMG I don't think there would be any problem with the majority of outlets passing on a drop in the VAT rate to punters. This post replies to this thread |
|
| David Pott 29/08/2008 00:15:50 |
RE: Hope for VAT cut on pub food bills Spain has had different rates of IVA (VAT) in bars and resturants since it was introduced there. The lowest rate was something like 4% which included the majority of bars and resturants. Next was about 8% which inluded the more select and 33% for the top end of the market. As VAT is only a tax which we collect as unpaid tax collectors for HMG I don't think there would be any problem with the majority of outlets passing on a drop in the VAT rate to punters. This post replies to this thread |
