Wetherspoon plans to reduce prices of food and beverages by 7.5% on Thursday to emphasize the impact of taxes on their operations. This initiative, named “tax equality day” by Wetherspoons, aims to showcase the advantages of a permanent VAT reduction for the struggling hospitality sector.
The objective of tax equality day is to illustrate to customers the disparities in tax levies on alcohol and food sold in pubs versus those sold in supermarkets. Customers visiting Wetherspoons’ pubs on Thursday will enjoy a 75p saving on every £10 spent, as food and drinks in pubs are subject to 20% VAT, while supermarkets pay zero VAT on food.
Wetherspoons argues that supermarkets utilize this tax advantage to offer discounted prices on alcohol. During the pandemic, VAT rates for the hospitality industry were reduced to 5% in July 2020, increasing to 12.5% between October 2021 and March 2022.
Tim Martin, the founder and chairman of Wetherspoon’s, highlighted the significant tax discrepancies between pubs, restaurants, and supermarkets. He stressed the need for a VAT cut to 12.5% to ensure the survival and growth of pubs, bars, and restaurants.
Three major hospitality organizations, UKHospitality, British Beer and Pub Association, and the Campaign for Real Ale (CAMRA), have expressed support for Mr. Martin’s one-day discount initiative.
This move by Wetherspoon comes as part of a broader campaign to address tax inequalities in the hospitality sector and advocate for fair treatment across different types of establishments.