JDW to reduce prices by 7.5% to highlight pub tax plight
The company’s pubs in England, Wales, Scotland and Northern Ireland will host a Tax Equality Day on 19 September to highlight the financial strain placed on pubs by burdensome taxes in what has become an annual event for the pub chain.
Each of the operators’ venues will cut prices by 7.5% in response to a triple whammy of high beer duty, rising business rates and VAT, which contributed to more than 200 pubs closing their doors for the final time during the first six months of 2019 – around 40 per month – according to research by real estate adviser Altus Group.
What’s more, all food and drink in pubs is subject to 20% VAT compared to supermarkets that benefit from a zero VAT rate on all food.
According to research reported by The Morning Advertiser, the average price of a pint has risen by 86p in the past decade. Figures from the Office of National Statistics reveal that the average cost of a pint of lager in May 2009 was £2.81 compared to £3.67 as of March 2019.
Huge disadvantage
Reiterating comments made last year, JDW founder and chairman Tim Martin – who has slashed prices on Tax Equality Day to highlight the benefit of a tax cut for a number of years – explained: “Pubs suffer a huge disadvantage, paying about 16p in business rates per pint versus about two pence for supermarkets.
“In addition, there is a huge VAT inequality and unfairness.
“A reduction in the level of VAT, on a long-term basis, will create a level playing field and generate growth and jobs in the important leisure and hospitality sector and help the high street, of which pubs are an integral part.
“Customers coming to our pubs on Thursday 19 September will find the price of their food and drink is lower than normal.
“We are keen to highlight the amount customers could save if VAT in pubs was lowered permanently.
“We’re aiming to make it the busiest day of the entire year in our pubs.”
What’s more, UKHospitality chief executive Kate Nicholls reasserted: “Tax Equality Day is a great way to highlight just how hospitality businesses are disproportionately hit by VAT.
“Pubs are paying around one third of their turnover in tax, which seriously restricts their ability to invest in their venues and staff and increases prices for customers.
“A cut in the rate of VAT for the hospitality sector could help to address this unfairness and allow pubs and bars to invest in their businesses and staff members, and provide even greater choice for customers.”
