JDW slashing prices to highlight benefit of permanent VAT cut

By Nikkie Thatcher

- Last updated on GMT

Company announcement: prices at JD Wetherspoon pubs will be cut later this month for Tax Equality Day
Company announcement: prices at JD Wetherspoon pubs will be cut later this month for Tax Equality Day

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Pub behemoth JD Wetherspoon (JDW) is cuttings its prices by 7.5% for one day in a bid to highlight showcase the positive impact a permanent VAT reduction would have for the hospitality sector.

Prices will be reduced on Thursday 14 September to mark Tax Equality Day and in Scotland, prices will be cut on food and non-alcoholic drinks, in line with Scottish licensing laws.

While all food and drink in pubs are subject to 20% VAT, JDW stated by comparison, supermarkets pay zero VAT and are able to use that saving to sell alcohol to customers at a discounted price.

JDW founder and chairman Tim Martin labelled the disparity in tax paid by the on-trade and off-trade as “the biggest threat” to the sector.

Huge pressure

Moreover, chef and pub and bistro operator Gary Usher recently called for a VAT reduction​ as has celebrity chef and publican Tom Kerridge​.

Kerridge said: “20% is a huge amount of pressure put onto hospitality, if you think about it, compared to the rest of Europe, which sites anywhere between 8% or 10% - a 10% reduction in VAT into our industry would make such a huge amount of difference, would relieve a massive amount of pressure.”

JDW’s Martin called on the Chancellor to create tax equality between pubs and supermarkets.

Biggest threat

He added: “The biggest threat to the hospitality industry is the vast disparity in tax treatment among pubs, restaurants and supermarkets.

“Supermarkets pay zero VAT in respect of food sales, whereas pubs and restaurants pay 20%. This tax benefit allows supermarkets to subsidise the selling price of beer.

“Pubs have been under fantastic pressure for decades, because of the tax disadvantages they have with supermarkets.

“Customers coming to JDW pubs on Thursday 14 September will find the price of their food and drinks to be lower than normal.”

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