JD Wetherspoon boss: VAT ‘militates against pubs’

13-Sep-2017 - Last updated on 13-Sep-2017 at 10:19 GMT

Punishment: Tim Martin said the tax difference between pubs and supermarkets was too high

Pubs are being penalised unfairly by VAT on food and drink, according to JD Wetherspoon chairman Tim Martin.

Speaking at the Wine and Spirit Trade Association annual conference, Martin said the tax difference between pubs and supermarkets was too high, and that encouraging people to go to pubs would generate more tax for the Government in the long run.

“In the UK, pubs pay 20% VAT on food and supermarkets pay by and large nothing at all,” he said. Our pubs sell a lot of food. We'd pay £90m or £100m less in VAT if we were a supermarket. It militates against pubs and a lot of them have been closing down.

“If we can generate more jobs through pubs, we will generate more tax in the long run. You generate more jobs and other taxes per pint if people go out. The price differential between a pub and a supermarket is too much for those not well off enough to be able to afford it. There's a strong argument that the tax difference between supermarkets and pubs needs to come down.”

VAT not excise duty

JD Wetherspoon pubs are cutting the prices of food and drink by 7.5% on Wednesday 20 September to highlight the benefit that a VAT reduction would bring to the trade.

Martin said that he has chosen to focus on VAT rather than excise duty because a duty cut would also help supermarkets, and not just pubs and restaurants.

“The on-trade does focus a lot on excise duty and it’s a strong argument,” he said. “But what you're doing if you campaign to cut duty is you're obtaining a tax cut for supermarkets if you are successful in your pleas. If you go for tax equality on something like VAT its making the playing field level, which is more important for us.”

Positive case for immigration

Martin also stated he would be making the positive case to the UK Government for immigration post-Brexit, after a leaked Home Office paper showed new restrictions on the number of low-skilled migrants could be introduced after the UK leaves the EU.

“It's important to realise that we do need immigration; most people I know on the 'leave' campaign felt that immigration was a necessity,” he said. “But it should be democratically controlled by the parliament of the country.

“Immigration has worked very well for the UK. I think that what Australia, North America, New Zealand, and places like London, show is that immigration can be and often is a good thing.

“That's the case I will be making to the Government, not just because I want someone behind the bar on a Saturday night, but because a gradually growing population goes hand in hand with an improving economy.”