Pub chain J D Wetherspoon (JDW.L) will once again slash its prices to mark Tax Equality Day, with the aim of highlighting the benefit of a permanent VAT reduction in the hospitality industry.
Wetherspoon will cut the price of all food and drink in its 862 pubs (not including Republic of Ireland) by 7.5% for one day.
A pint of real ale normally costing £1.99 ($2.75) will be £1.84 while a traditional breakfast that costs £3.59 will be down to £3.32.
Currently, all food and drink in pubs and restaurants is subject to a 5% VAT instead of 20%, as a result of action taken by chancellor Rishi Sunak last year in light of the pandemic.
But the government plans to return VAT to 20% gradually in stages. It will start by hiking VAT to 12.5% on 1 October, which means prices on meals at Wetherspoons will increase by about 50p. Prices of drinks, for now, will remain unchanged.
Wetherspoons pointed out that in contrast, supermarkets pay no VAT on food, and are able to use that saving to sell alcohol to its customers at a discounted price.
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“We urge the chancellor to create tax equality between pubs and supermarkets by making the current VAT regime for pubs permanent.” said Wetherspoons chairman Tim Martin.
Martin said the main impact of tax inequality is on high streets and town and city centres, “which heavily depend on a diversity of prosperous hospitality businesses for economic, social and employment success.”
“Pubs have been under fantastic pressure for decades due to the tax disadvantages that they have with supermarkets,” he said.
In Scotland, prices will be reduced on meals and non-alcoholic drinks only due to licensing restrictions.
The first Tax Equality Day took place in the UK in 2013, with 15,000 pubs and restaurants participating. It was started by the Jacques Borel VAT Club. Borel was a leading VAT cut campaigner.
In 2015, Wetherspoon pulled out of the VAT Club but said it would continue to campaign for a VAT reduction.
At the time, Martin had said “Borel has done an amazing job campaigning for a VAT cut over the past five years.
"He has led the way and has made great progress in terms of raising the profile of the case for a VAT cut and also for engaging with MPs and policy makers."
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