Pub chain plans VAT-cut day of action

Beer drinkers have something to celebrate this weekend when national chain Wetherspoons is cutting the price of a pint in the build up to its proposed UK-wide National Tax Equality Day

The pub chain is planning a tax action day on Thursday September 19 to highlight the impact of the tax regime on the pub industry.

The move forms part of Wetherspoon chairman Tim Martin’s campaign to highlight what he sees as the tax and tariff advantages of leaving the EU.

More than 600 of the company’s pubs are now serving a pint of Ruddles (brewed by Greene King) for £1.69, reducing the cost by around 20p. 

This weekend Wetherspoons says a further 160 pubs will be offering a pint for £1.59 or below, including 36 pubs which will be serving a pint for £1.39. The remaining pubs will serve a pint between £1.99 and £2.89, depending on the individual pub’s location. This includes pubs in Central London.

Martin said: ‘At the current time customers and businesses pay tariffs on thousands of products which are imported from outside the EU.

’These tariffs are collected by the UK government and sent to Brussels.  Provided we leave the Customs Union on 31 October, the government can end these protectionist tariffs, which will reduce prices in supermarkets and pubs.

‘In order to illustrate this point, Wetherspoon has decided to reduce the price of Ruddles bitter, brewed by Greene King.

‘A lot of politicians have misled the public by suggesting leaving the Customs Union would be a “cliff edge” or “disaster”.

‘This is the reverse of the truth. Ending tariffs will reduce prices.’

The beer price drop is a taster for Martin’s one-day VAT protest, scheduled for next week, when Wetherspoon’s pubs will be cutting the price of all food and drink by 7.5% on Thursday 19 September to highlight what he says are inequalities in the VAT regime.

Prices at each of the company’s pubs (not including airport sites or those in the Republic of Ireland) will be reduced for one day only. In Scotland, prices will be reduced on all food, soft drinks, non-alcoholic drinks and hot drinks.

At present, all food and drink in pubs is subject to 20% VAT, compared with supermarkets which benefit from zero-rate VAT on all food.  Martin argues that as a result, supermarkets are able to use that saving to sell alcohol at a discounted price.

He said: ‘Pubs suffer a huge disadvantage, paying about 16 pence 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 the important leisure and hospitality sector and help the high street, of which pubs form an integral part.

‘Customers coming to our pubs on Thursday 19 September will find that the price of their food and drinks is lower than normal.

‘We are keen to highlight the amount customers could save, if VAT in pubs were lowered permanently.

‘We’re aiming to make it the busiest day of the entire year in our pubs.’

UK Hospitality’s chief executive, Kate Nicholls, said: ‘Tax Equality Day is a great way to highlight just how hospitality businesses are disproportionately hit by VAT.

‘“Pubs are paying around one-third of their turnover in tax, which seriously restricts their ability to invest in their venues and staff and increases prices for customers.

‘A cut in the rate of VAT for the hospitality sector could help to address this unfairness and allow pubs and bars to invest in their businesses and staff members, while providing even greater choice for customers.’

Pat Sweet

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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