Calls to extend VAT reduction to beer

31-Jul-2020 - Last updated on 31-Jul-2020 at 08:43 GMT

Extend the reduction: the Government has been urged to help out wet-led pubs by slashing VAT on beer as well as food

The British Beer & Pub Association (BBPA) has said VAT reduction should be extended to pints as well as food to aid businesses less likely to benefit from the Eat Out to Help Out scheme.

These calls come as European nations including Italy and Spain have extended similar VAT cuts, after a green light from the European Commission that EU member states can apply targeted reductions to drinks.

Emma McClarkin, BBPA chief executive said: “We welcome confirmation from the European Commission that VAT can be reduced on beer served in pubs and urge the UK Government to do so, as it has done for food and accommodation already.

“The cuts to VAT on food and accommodation, and the Eat Out to Help Out scheme, have been welcomed by our sector, and we continue to support and promote them. For community led pubs that don’t do food, and brewers, more support can and should be given.

Deserving of more

“We urge the Government to extend its VAT cut on food and accommodation in pubs to include beer as well. Such a move will greatly support our world class brewers and community pubs across the UK that need and are deserving of more support.”

The association said it warmly welcomed the Eat Out to Help Out scheme and has encouraged pub businesses to sign up to take part in it.

Wet-led community pubs shared their frustration and disappointment at the omission in this area when a VAT cut was announced by Chancellor of the Exchequer Rishi Sunak, as reported by The Morning Advertiser.

Publican Andy Madsen said a beer reduction would help him with staff and operational costs at his community, wet-led pub the Park Inn, Southampton, Hampshire.

Heart sank

Madsen said: “I was really hoping for 5% off VAT on beer. When he [Rishi Sunak] said 15%, the old heart jumps and then he said it was food, which is seriously disappointing.

“I know they are protecting the hospitality trade, the restaurants, the takeaways and pubs that do food but there are many, many pubs like me.

Madsen added: “I thought they would do something on beer duty and it was surprise that didn’t happen. My heart definitely sank when he didn't include us in that 15% VAT discount.

“That 15% discount really would have helped with the increase in staff I'm going to need for the table service and the lack of trade.”

Operators chose an extension of the VAT reduction scheme beyond 21 January 2021 as top of their wishlist in the latest Hospitality Leaders poll carried out by HIM/MCA Insight.