Pub chain JD Wetherspoon has called on the Government to provide tax parity between pubs and supermarkets, it has announced today.
In the six months ended January 27th 2013, the company paid total taxes of £273.5 million, a rise of £23.4 million on the previous year and emphasised the disparity between this and the figure paid by grocers.
“If we were taxed on the same basis as supermarkets, we would have paid £40.7 million less, since supermarkets pay virtually no VAT in respect of food sales,” the group said in a results statement.
“We believe there to be an overwhelmingly strong case for tax parity between pubs and supermarkets, since lower supermarket taxes help them to sell alcoholic drinks at extremely low prices, compared with those of pubs.”
Alcohol has been an area of considerable focus for the Government this week as Prime Minister David Cameron announced that he will “deal with” the low price of alcohol sold in UK supermarkets, despite reports that plans for a 45p per unit minimum alcohol pricing have been scrapped amid opposition within his Cabinet.
While Cameron refused to acknowledge the alleged U-turn, he told the House of Commons this week: “There is a problem with deeply discounted alcohol in supermarkets and other stores, and I am determined to deal with it.
“We have published proposals, and are considering the results of the consultation on them, but we must be in no doubt that we must deal with the problem of 20p or 25p cans of lager being available in supermarkets. It has got to change.”
However, JD Wetherspoon Chairman Tim Martin noted that no minimum pricing would be necessary if taxes were aligned across sectors.
Commenting on the importance of altering the current tax system, Martin said: “As previously stated, the biggest danger to the pub industry is the VAT disparity between supermarkets and pubs and the continuing imposition of stealth taxes, such as the late-night levy, and the increase in fruit/slot machine taxes.”