etherspoonpubs are set to cut prices of food and drink for one day only on Thursday as the company seeks to build popular support to reduce the tax burden for the hospitality sector.
Prices across the firm’s UK pubs will drop by 7.5% across the company’s 851 UK pubs, to highlight the benefits of a permanent cut in VAT for hospitality firms. The price drop represents a saving of just over £2 for a £27 spend in one of its pubs, or the equivalent of about 30p off a pint in one of its central London locations.
A temporary VAT cut to 12.5% was introduced for hospitality firms by then-chancellor Rishi Sunak in October 2021, before moving back up to the normal 20% rate in April 2022.
Wetherspoon chairman, Tim Martin, said: “ Taxes should be fair and equitable. It is unfair that supermarkets pay zero VAT on food, but pubs and restaurants pay 20 per cent.
“Pubs have been under fantastic pressure for decades due to the tax disadvantages that they have with supermarkets. Government does best when it does not discriminate among various types of business selling the same products.”
It comes as new figures reveal tax collected from VAT in the UK has risen by 60% over the last decade, with VAT making up a record 22% of HMRC total tax receipts and being used more and more to raise revenue.
VAT is also the fastest growing tax of the biggest five taxes in the last decade, according to research from Thomson Reuters, with total receipts growing from £98 billion to £157 billion in the year ending 31 May 2022.