‘Ever-widening gap’: Wetherspoon boss Tim Martin urges Burnham to cut more pub taxes
JD Wetherspoon boss Tim Martin has called on the Prime Minister to go further to reduce the soaring tax burden faced by pubs.
The chairman of the UK’s best-known pub chain said Burnham’s decision to slash business rates for pubs is an “implicit recognition that the hospitality sector is over taxed”.
The Prime Minister announced on Thursday that he will cut business rates by 20 per cent for pubs, clubs and music venues, in a £100m pledge which he said is proof he is backing “the businesses that people want to see in their communities”.
But Martin urged Burnham to go further, dubbing the tax “a small move in the right direction”.
“The biggest disadvantage for pubs versus supermarkets relates to VAT, where supermarkets pay zero on food sales and hospitality venues, including pubs, pay 20 per cent.
“This disadvantage is responsible for the ever-widening gap in the price of a pint or meal in a pub compared to a supermarket,” he said.
Wetherspoon warns on profits
Martin has long campaigned for governments to hike taxes on supermarkets, which he says are stealing sales from pubs because they are able to sell alcohol at a much cheaper rate.
On Wednesday, Wetherspoon warned on its profits for the fourth time this year, prompting the firm’s shares to dive by more than nine per cent.
Martin said the pub chain was facing falling sales and “higher costs in the areas of food, labour, repairs, energy and business rates”.
The Wetherspoon boss has thrown his weight behind an industry campaign for the government to cut value-added tax (VAT) from 20 to 10 per cent for hospitality firms.
These lobbying efforts have been led by celebrity chef Tom Kerridge, who claims this tax cut would deliver vital breathing space for hospitality firms, which have faced rising business rates and employment costs in recent months.
Earlier this month, Kerridge told City PM that he was “confident” of having an “open conversation” with Burnham over hospitality VAT.
Pub tax cut ‘is funded’, Treasury says
The government said the £100m cost of the cut to business rates will be paid for by clamping down on vape shops and tax-avoidant online retailers.
Emma Reynolds, chief secretary to the Treasury, was pressed on whether this tax cut is fully funded because the rule changes on vape shops and online marketplaces are currently in consultation.
She told Sky News: “This is fully funded, and it will be funded in a couple of major ways. Firstly, by looking at business rate reliefs on businesses that cause social harm, such as vape shops, and secondly by cracking down on those online businesses who are not paying VAT.”
“I am confident as chief secretary, having looked at the numbers, and we will set out the numbers in more detail at the budget, that we will fund this announcement in the ways that I’ve just mentioned.”