Tim Martin attacks tax burden on pubs

JD Wetherspoon chairman Tim Martin has attacked the burden of taxation being imposed on pubs.

Martin said that in the six months ending 25 January, the company paid £190m in tax while making £17.3m after tax.

He said: "On an annualised basis, this equates to Wetherspoon making £50,000 after-tax profit per pub, while generating tax of about £530,000 per pub.

"In our view, the levels of tax now being levied are unsustainable for many pubs, and this, combined with other factors, is contributing to the closure of pubs in record numbers.

"The government seems not to understand the economic impact of new taxes and legislation and continues to impose new burdens at a huge rate. For example, in the current financial year, it is estimated that Excise Duty increases will cost Wetherspoon an additional £15 million, while new legislation increasing holiday entitlements will cost a further £4 million.

"In order for the pub industry, and business in general, to prosper, taxes and social legislation imposed on businesses need to be reduced or to stay at current levels for a considerable number of years.

"Opportunistic 'tax grabs' and employee legislation to 'curry favour' with voters which businesses cannot afford will prove to be counter productive for the government.

"Even the closure of one small pub results in a far greater loss of revenue to the government than it does to the publican or pub owner.

"Costs of taxes and regulations have gone too far and Britain has now become a highly taxed economy, with high and increasing employment costs, which will have predictable and inevitable effects on employment levels and tax income in the near and medium term."

Profit before tax before exceptional items was up 2% to £30.8m. Exceptional items of £5.2m related mainly to disposals of properties which we no longer intend to develop and to major litigation costs involving legal action against its former estate agents Van de Berg.

Like-for-like sales in the six weeks to 8 March rose by 1.9%, well down from the 6% plus figures reported in the early weeks of 2009.