Wetherspoons vows to keep 28% price drop on drinks and food if Rishi Sunak makes VAT cut permanent
WETHERSPOONS has vowed to keep a 28% price drop on food and drink if the Chancellor permanently scraps VAT for the hospitality industry.
VAT - value added tax - is paid by businesses on items or services they sell, which is typically passed on to customers in the price they pay at the till.
The Chancellor slashed the rate from from 20% to 5% for food, drink and holiday businesses as part of his mini-Budget on July 8.
Businesses don't have to pass on the price cut but Wetherspoons did at all 900 of its boozers, knocking up to 28% off menu prices, with pints starting at £1.29.
The tax holiday has now been extended for another six months beyond its original March 31 deadline, until September 30.
Now, 'Spoons boss Tim Martin has promised to keep the cut prices if Rishi Sunak makes the tax holiday permanent.
Full list of businesses where VAT has been cut
THE VAT rate has been slashed for the hospitality and tourism industries. This includes:
- Restaurants, cafes and pubs
- Hotels, inns, boarding houses and similar establishments
- Holiday and caravan parks and other holiday accommodation businesses charging fees for tent pitches or camping facilities
- Shows
- Theatres
- Circuses
- Fairs
- Amusement parks
- Concerts
- Museums
- Zoos
- Cinemas
- Exhibitions
- Similar cultural events and facilities.
In the pub chain's interim results published today, he said: "In July 2020, when this reduction was first announced, the company lowered its pricing on a wide range of products, including food, soft drinks and real ale.
"If the chancellor decides to make these VAT reductions permanent, the
company intends to retain these lower prices indefinitely."
The pub chain has been at the forefront of a campaign to reduce the "unfair" amount of tax slapped on pubs and restaurants over the past few years.
Mr Martin wants the tax to be brought more inline with the 0% VAT charged on food and booze sold in supermarkets.
Every year, the chain slashes prices on Tax Equality Day to reflect the effect of reducing VAT.
But so far, the Chancellor has showed no sign that the tax break will stick around beyond the deadline.
From October, an interim rate of 12.5% will be applied to food and drink sold in pubs and restaurants before returning to the usual rates in April 2022.
In total, the move will see VAT cut by almost £5billion, and it's hoped the tax break will help businesses save jobs in the leisure industry.
It's unlikely the coronavirus relief will be extended ad Mr Sunak now faces the gargantuan task of starting to plug the black hole in the country's finances.
New figures released today show the UK's borrowing in the financial year so far - between April 2020 and February 2021 - has hit a record £278.8billion.
Other Covid- relief packages have also been set a end date, including a £20 a week uplift to Universal Credit payments and a stamp duty holiday.
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A Treasury spokesperson said: "We’ve supported pubs since the start of the outbreak through tax cuts, furlough, grants and other support schemes. We’ll continue to do so."
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Wetherspoons has said it will reopen almost 400 pubs in England with gardens and roof terraces in mid-April when the hospitality industry can open for outdoor service.
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It will also reopen 60 pubs in Scotland on April 26, when lockdown restrictions are eased.
These are all the rules you'll have to follow when you head to your local 'Spoons from next month.