JDW boss blasts Gov proposal to increase VAT

By Nikkie Thatcher contact

- Last updated on GMT

Trade comparison: 'It doesn’t make economic sense that food bought in pubs, restaurants and cafés attract VAT of 20%, when food is VAT-free in supermarkets,' says JD Wetherspoon (JDW) boss Tim Martin
Trade comparison: 'It doesn’t make economic sense that food bought in pubs, restaurants and cafés attract VAT of 20%, when food is VAT-free in supermarkets,' says JD Wetherspoon (JDW) boss Tim Martin

Related tags: Jd wetherspoon, Legislation, Government

JD Wetherspoon (JDW) has criticised the Government’s plans to increase VAT back to 20% for food in pubs, restaurants and cafés from next month (April).

This comes after the British Beer & Pub Association (BBPA) wrote to Chancellor Rishi Sunak, calling for help for the sector​ ahead of his Spring Statement this week (Wednesday 23 March).

The letter urges the Government to extend the energy price cap to small businesses and supply to joint residential and commercial premises and extend the current 12.5% VAT rate for food and drinks sold in pubs and the wider hospitality sector with a view to making this permanent.

Furthermore, an inquiry by the All-Party Parliamentary Group for Hospitality and Tourism also called for VAT to stay at 12.5%.

Not economic sense

JDW founder and chairman Tim Martin has often called for tax equality between the on and off-trade.

He said: “It doesn’t make economic sense that food bought in pubs, restaurants and cafés attract VAT of 20%, when food is VAT-free in supermarkets.

“Pubs, restaurants and cafés form integral parts of high streets, whereas supermarkets are often in edge-of-town or out-of-town locations.

“Favouring supermarkets over pubs is bad for high streets and town centres. It is also an accepted principle of taxation that it should be fair and equitable, treating businesses that sell similar products in a similar way.”

Martin claimed tax discrimination creates economic distortions and called for a “sensible rebalancing” of tax.

Favourite tax treatment

He added: “Supermarkets have clearly used their favourite tax treatment to subsidise the price of beer, wine and spirits over recent decades.

“Pubs, restaurants and cafés play in important role in the social fabric of the nation, as well as generating employment and vast amounts of taxes for the Treasury.

“The hospitality industry understands Governments need tax – but there should be a sensible rebalancing, so all businesses selling products are treated in the same way.”

The Daily Mail​has reported the Chancellor is considering whether to extend the lower rate of VAT ahead of his Statement.

Related topics: JD Wetherspoon

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