Pub giant drops menu prices 7.5% in protest over VAT disparity

JD Wetherspoon pub

JD Wetherspoon is slashing prices of food and drink by 7.5% in all 900 of its pubs for today only in protest over what it calls VAT “disparity” in the UK.

The chain is urging legislators to change regulations that it believes give pubs a significant tax disadvantage against supermarkets.

In its latest financial report, the company noted that pubs and restaurants pay far higher levels of UK tax than do supermarkets.

“The main disparity relates to VAT since supermarkets pay no VAT in respect of their food sales, whereas pubs pay 20%, enabling supermarkets to subsidise their alcoholic drinks prices. Pubs also pay approximately 18p per pint in respect of business rates, while supermarkets pay less than 2p per pint,” it said.

The chain insists the tax disparity with supermarkets is “unfair”. It claims pubs create significantly more jobs and more taxes per pint or per meal than do supermarkets and it therefore does not make social or economic sense for the UK tax régime to favour supermarkets.

“We acknowledge the need for companies to pay a reasonable level of taxes, but hope that legislators will make prompt progress in creating a level playing field for all businesses which sell similar products,” it said.

Chairman Tim Martin said the decision to drop food and drink prices today would hopefully raise awareness of the issue with customers. “We are keen to highlight the amount which customers would save if VAT in pubs was lowered permanently,” he said.

In its interim report for 2017, JD Wetherspoon revealed that food sales have grown 5.1% in the past year, double that of the previous 12 months. Bar sales were up 2.4%.

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