JDW chair Tim Martin calls for industry to back pubco’s Tax Equality Day

31-Jul-2018 - Last updated on 31-Jul-2018 at 09:46 GMT

Urging support: JDW chair Tim Martin has called upon hospitality businesses to demonstrate the potential value of a VAT cut

JD Wetherspoon chairman Tim Martin has called on pub and restaurant operators to support a UK-wide Tax Equality Day on 13 September to tackle "inequality and unfairness" in the tax system.

Each of JDW’s pubs in England, Wales and Northern Ireland will cut the price of all food and drink by 7.5% for one day only – with pubs in Scotland to offer customers a 7.5% reduction on all food, soft drinks and hot drinks – to highlight the benefit of a VAT reduction across the hospitality industry.

Currently, all food in pubs is subject to 20% VAT compared to the 0% VAT rate on the vast majority of supermarket food products.

Martin explained: “Pubs suffer a huge disadvantage paying about 16p in business rates per pint versus about two pence for supermarkets.

“In addition, there is a huge VAT inequality and unfairness.

“A reduction in the level of VAT on a long-term basis will create a level playing field and generate growth and jobs in an important and vital industry – especially in beleaguered high streets.

“We’re aiming to make it the busiest day of the entire year in our pubs and would urge other pub and restaurant operators to participate too.”

Hospitality ‘disproportionately hit’

The move has been backed by UKHospitality (UKH) and the British Beer & Pub Association (BBPA), who have called upon their members to follow suit.

UKH chief executive Kate Nicholls said: “Tax Equality Day is a great way to highlight just how hospitality businesses are disproportionately hit by VAT.

“The tax disparity between the hospitality sector and supermarkets is still far too high. Pubs are paying around a third of their turnover in tax compared to a fifth for big supermarkets able to sell alcohol at very cheap prices.

“A cut in the rate of VAT for the hospitality sector can help address this unfairness and allow pubs and bars to invest in their businesses and staff members.

“We hope that everyone will support this year’s Tax Equality Day and send a clear and unequivocal message to the Chancellor to give the sector the VAT cut it deserves.”

Tax cut should be ‘top priority’

BBPA chief executive Brigid Simmonds added: “Cutting the tax burden on pubs should be a top priority for the Government.

“We welcome this Tax Equality Day initiative as a way of reminding customers that our pubs are overtaxed and we need action now to hold down the cost of going out.

“VAT reform is long overdue and beer duty and business rates are disproportionately high for pubs in the UK.”

'Welcome' campaign

Nigel Evans MP for Ribble Valley, Lancashire, added: “The hospitality campaign to recognise tax equality is a welcome and much anticipated event that now resonates with our national consciousness.

“This year’s Tax Equality Day has a special significance as it could be the final year before it achieves its goal as a result of the tax cutting freedoms that Brexit will endow the Government with.”