Wetherspoon boss Tim Martin slashes prices in tax battle with supermarkets
The outspoken Wetherspoon boss Tim Martin has warned that the biggest threat to the hospitality industry is the “vast disparity” in tax treatment between pubs, restaurants and supermarkets.
Martin is urging Chancellor Jeremy Hunt to create “tax equality” between pubs and supermarkets.
“Supermarkets pay zero VAT in respect of food sales, whereas pubs and restaurants pay 20 per cent,” he said.
To highlight the disparity, the Wetherspoon chair will slash the prices of food and drinks by 7.5 per cent across his 800 pubs on Thursday 14 September.
A customer spending £10 on food and drinks will pay £9.25 on the chain’s “Tax Equality Day”.
“Pubs have been under fantastic pressure for decades, because of the tax disadvantages which they have with supermarkets,” he added.
In August, the alcohol duty tax hikes announced in the Spring Budget came into force.
The Treasury said that the new rules would see duty paid on drinks on tap in pubs 11p cheaper than in supermarkets.
However, Martin previously warned that pubs also pay about 25 pence per pint in business rates, whereas supermarkets pay a “fraction” of this amount – perhaps two pence a pint or so.
“Supermarkets use this tax advantage to subsidise beer and wine prices,” he told The Independent, last month.
While the government’s alcohol duty rises were made to level the playing field between the two sectors, the price of a pint often remains more expensive than buying larger quantities of beer at home.
A treasury spokesperson told City A.M: “The government is providing billions of pounds of support for the hospitality industry, including via business rates relief, the energy bills discount scheme and draught relief.
“VAT reliefs are exceptions, not the norm. Supermarket food is one such exception, as the government recognises that families shouldn’t bear all the VAT costs of the essentials they rely on.”