JD Wetherspoon PLC (LSE:JDW), the budget pub chain, will slash all its prices by 7.5% at all of its pubs on Thursday, as it plans to urge the government to scrap or reduce VAT in the hospitality industry.
Celebrating Tax Equality Day, Wetherspoons pointed out that the hospitality industry is taxed 20% on its VAT while supermarkets don’t pay any on food, which in turn allows them to sell alcohol at a discounted price.
Wetherspoon’s founder and chairman, Tim Martin, said: “The biggest threat to the hospitality industry is the vast disparity in tax treatment among pubs, restaurants and supermarkets.
“Pubs have been under fantastic pressure for decades, because of the tax disadvantages which they have with supermarkets. It doesn’t make sense for the hospitality industry to subsidise supermarkets.
“We urge the chancellor to create tax equality between pubs and supermarkets.”
Under the one-day offer (or if hospitality VAT was to be scrapped), a £25 bill would have £1.87 knocked off it bringing the total to £23.13, the London-listed pub group’s website revealed.
Echoing their support of a VAT reduction are several industry heads including Kate Nicholls, chief executive officer of UKHospitality, who said the cut would result in “lower prices and more jobs, leading to regeneration of our high streets and communities”.
Shares in Wetherspoon have remained flat on Monday, having opened the week’s trading at 685p.