VAT change could cost pub trade £36m

28-Nov-2008 - Last updated on 11-Mar-2017 at 19:45 GMT

Related tags Paul wigham Alistair darling

Re-programming tills is expensive business

The 2.5% VAT cut could cost the pub industry up to £36m in re-programming tills and re-printing menus — and licensees have suffered a week of chaos with just six days to make the enforced changes.

The 2.5% VAT cut could cost the pub industry up to £36m in re-programming tills and re-printing menus.

The astonishing estimate is based on a survey of Association of Licensed Multiple Retailers (ALMR) members who are having to pay, on average, £570 each to make the changes. It believes the industry could be facing a bill of up to £36m to make the changes.

The Chancellor gave retailers just six days to make the changes after announcing the 13-month cut in his Pre-Budget Report. The changes come into effect on Monday 1 December.

The industry is already outraged at the 8% duty hike on beer to off-set the VAT cut. "Licensees up and down the country have faced a week of chaos just because it has been decided that the 1 December is a nice neat date to implement the changes," said ALMR chief executive Nick Bish.

"Most pubs and bars operate on a Sunday through Saturday basis, whilst the support businesses that they rely upon to make the changes necessary will shut up shop at 5pm on Friday. This means that licensees will be particularly affected by Darling's December disarray." The situation is a complete and total mess. This is the worst example of policy on the hoof. Paul Wigham, Bar Group

"The biggest irony is whilst they have to re-configure their tills and reprint their menus they will be practically the only group who won't benefit from Alistair Darling's tinkering with VAT — the alcohol duty rise will swallow up any customer benefit."

Fallout

Alex Salussola, chairman of Glendola Leisure, added: "This Government may be happy to make policy off the cuff, but it's us who have deal with the fallout. The simple fact is that we need to completely revisit the way our operations work — and we have had less than a week to do it. We haven't even had time to work out all the ramifications and all the changes we need to make, let alone fully account for the cost implications.

"It's not just a matter of ordering new materials, every single one of our business elements needs to be re-programmed.

"There seems to be a complete lack of understanding from Whitehall not only about the practical changes that need to be made, but also the time needed for publicans to understand the cost implications and fit them into the business planning."

Paul Wigham, chief executive of the Bar Group, said: "The situation is a complete and total mess. This is the worst example of policy on the hoof. We know our industry and we know what makes our customers tick. There is no beneficial effect anywhere as far as I can see — not enough is being given back to stimulate demand and now a pile of extra costs have been thrown in.

"The cost of re-printing menus and re-engineering tills alone will more than offset the reduction in VAT. This is a disaster for the industry. You need to watch the market over the next month."

How are you coping with the VAT change? How much has it cost you? Let us know by hitting Post a comment below.