Wetherspoon is implementing a 7.5% reduction in food and beverage prices today to emphasize the impact of taxes on their operations. This initiative, named “tax equality day” by Wetherspoons, aims to showcase the importance of a permanent VAT decrease for the struggling hospitality sector.
The objective of tax equality day is to demonstrate to customers the disparity in tax application on alcohol and food sales in pubs versus supermarkets. Customers visiting Wetherspoon’s pubs on September 18 will enjoy savings of 75p on every £10 spent, as pubs are subject to a 20% VAT on their offerings, while supermarkets are exempt from VAT on food sales.
Wetherspoons asserts that supermarkets leverage this tax advantage to offer discounted prices on alcohol to consumers. During the pandemic, VAT rates for the hospitality industry were reduced to support businesses, with the rate dropping to 5% in July 2020, gradually increasing to 12.5% between October 2021 and March 2022.
Tim Martin, the founder and chairman of Wetherspoon’s, highlighted the substantial tax discrepancy between pubs, restaurants, and supermarkets as a major challenge for the hospitality sector. He emphasized the need for a VAT cut to 12.5% to enable pubs, bars, and restaurants to thrive, invest, and generate employment opportunities.
The discounted prices at Wetherspoon’s on September 18 have garnered support from prominent hospitality organizations, including UKHospitality, British Beer and Pub Association, and the Campaign for Real Ale (CAMRA). They echo Mr. Martin’s call for tax equality to be established by the government.