Branded ‘Tax Equality Day‘, Wetherspoon’s pubs in England, Wales and Northern Ireland will be cutting the price of all food and drink by 7.5 per cent on Wednesday the 20th of September.
At present, all food and drink in pubs is subject to 20 per cent VAT, compared with food in supermarkets which benefits from zero-rate VAT.
As a result, supermarkets are able to use that saving to sell alcohol at a discounted rate, pubs argue.
Pubs also argue that supermarkets pay around 2 pence per pint of business rates, whereas pubs pay about 18 pence.
Explaining why students should support the campaign, Tim Martin, Wetherspoon’s chairman, said: “Students can continue to support the campaign for tax equality by making sure they understand these 2 facts: pubs pay 20% tax for food sales and supermarkets nothing. That is unfair, and also pushes up the price of a pint or meal in a pub versus a supermarket.”
“Since pubs generate more jobs and tax per pint and per meal anyway, it makes economic sense for the government to tax pubs and supermarkets at the same rate”, Mr Martin told The Mancunion ahead of the campaign day for lower VAT in the hospitality industry.
Tim Martin hopes that students will join him in his pubs, claiming that “staying in halls of residence or student digs all the time would drive anyone mad.”
However, Mr Martin did jokingly tell The Mancunion: “But don’t stay so long in our pubs that you get behind with your studies, I beg you… my son went to Manchester University and lived in Fallowfield, so I’m speaking from experience…”
The Wetherspoon’s chairman suggested that “pubs are an important part of the social fabric of the UK”, providing “a melting pot for local communities, which all social classes can enjoy.”
“This unfair combination of taxes has meant that pub prices have increased at a far higher rate than supermarkets over the years”, something which Mr Martin told The Mancunion has “resulted in customers — including students — being unfairly encouraged by tax policies to buy beer and food from supermarkets, so thousands of pubs have lost trade and closed in the last decade.”
Mr Martin said: “In a nutshell, we believe the government will create more tax and jobs if it equalizes tax, and will also benefit the UK socially by reversing the alarming trend of pub closures. Students and others will pay a lot less for pub and restaurant meals if the government supports tax equality.”