UK-based pub company JD Wetherspoon has announced that it would slash food and drink prices by 7.5% across all its outlets for one day on 14 September 2023.
The Caterer has reported that the company plans to reduce prices for the duration of the Tax Equality Day.
With this move, JD Wetherspoon aims to underline the benefit of a permanent VAT reduction in the hospitality industry.
During the Covid-19 pandemic, the UK Government reduced value-added tax (VAT) by 5% to support the hospitality sector. However, it was standardised to 20% again in April 2022.
While the hospitality sector is subject to 20% VAT, some major supermarkets in the country pay zero VAT on food and sell alcohol at a lower price.
The Caterer quoted JD Wetherspoon founder and chairman Tim Martin as saying: “The biggest threat to the hospitality industry is the vast disparity in tax treatment among pubs, restaurants and supermarkets.
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“Supermarkets pay zero VAT in respect of food sales, whereas pubs and restaurants pay 20%.
“It doesn’t make sense for the hospitality industry to subsidise supermarkets. We urge the chancellor to create tax equality between pubs and supermarkets.”
Wetherspoon’s Scottish sites will also reduce the costs of food and non-alcoholic drinks as per the Scottish licensing laws.
According to a report by the Guardian, JD Wetherspoon planned to further divest its pub portfolio in November 2022 due to rising expenses and slow sales.