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Do you think reducing VAT in pubs and restaurants...



The Large One

Who's Next?
Jul 7, 2003
52,343
97.2FM
... will have the effect the catering and hospitality industry is claiming (i.e. an economic boost, and more jobs)?


Pubs and restaurants cut prices in VAT protest

Thousands of pubs and restaurants are dropping their prices by 7.5% on Wednesday in protest at current tax conditions.

The campaign, called "Tax parity day", has been organised by the lobby group of French businessman Jacques Borel. Currently customers pay 20% VAT on food consumed in pubs and restaurants.

Campaigners say a VAT cut from 20% to the government's reduced rate of 5%, would generate an extra £1.5bn in taxes in just three years and 600,000 jobs.

However, the government disputes the figures. "We do not accept the industry's case for a VAT rate cut for restaurants and catering," a Treasury spokesperson said. "A 5% reduced rate on catering services is estimated to cost around £9bn to the Exchequer."

There are three rates of VAT: the standard rate of 20%, the reduced rate of 5% and the zero rate. Most food is zero-rated but food sold in pubs and restaurants has to include a VAT charge of 20%.

Campaigners argue that this is unfair, and VAT should be cut to the reduced rate of 5% - which at the moment mainly applies to domestic energy supplies.

Mr Borel, who has launched similar campaigns in France and Belgium, argues that the current VAT regime is unfair as supermarkets do not charge VAT on food because it is taken and consumed off the premises. Speaking to BBC Radio 5 live, James Staughton, managing director of St Austell Brewery and chairman of the Independent Family Brewers of Britain, said he was taking part in the one day price reduction because he believed a tax cut could boost employment and help growth.

"We are a large industry... the hospitality sector looks after visitors. We are a seasonal business and by increasing the number of visitors (through price cuts) we will help the economy."

The companies involved say they expect to get a 10% increase in sales. Large chains such as Pizza Hut and JD Wetherspoon are taking part in the campaign.

Tim Martin, chairman of the JD Wetherspoon pub chain, told BBC Radio 5 live, "Our point is that not everyone pays VAT in the same way pubs do... supermarkets can subsidise their sales of alcohol, each pint that's sold in a pub generates far more tax than it does in a supermarket."

VAT has frequently proved controversial. Anomalies include zero-rated VAT on cold take-away food, while hot take-away food is subject to the standard rate. Nuts in their shells are similarly zero-rated, while shelled nuts are not.

Last year, the government reversed its part of its plans to impose VAT on Cornish pasties and other baked goods sold on shelves.
 






BLOCK F

Well-known member
Feb 26, 2009
6,317
Can't see it myself.
Why should pubs and restaurants be a special case?
The reason that pubs charge a lot more for alcohol than supermarkets is due to a variety of reasons and not just VAT.This has always been the case,but in recent years the gap between pub and supermarket prices has widened;again for a variety of reasons that many of us are already aware of.This price disparity has contributed to the fall-off in what is known as on trade sales of alcohol,although it is by no means the only reason.It is also why the pub trade bodies generally back a minimum price for alcohol.Not for the health of the nation but the thought that the price differential between on and off trade prices would narrow,thus benefitting pubs.
Pubs have to adapt to the new market place and stop whinging about VAT.
As for restaurants,many are so bloody expensive and offer poor value for money that they deserve to go out of business.The rest will thrive if they offer good value,regardless of the level of VAT.
Economic boost and more jobs?Marginal at best.
I speak as one who spent most of my working life in the industry and whose last job was the director of a pub company.
 


Stat Brother

Well-known member
NSC Patreon
Jul 11, 2003
73,379
West west west Sussex
It would be no different to petrol prices.
There's no way the full tax cut would be passed onto the customer, so what's the point.
 




Herr Tubthumper

Well-known member
NSC Patreon
Jul 11, 2003
59,204
The Fatherland
It would be no different to petrol prices.
There's no way the full tax cut would be passed onto the customer, so what's the point.

I tend to agree with this. And I'm not sure this will make much difference to my decision making when it comes to how to spend my disposable income either. The restauranteurs will not give the full discount so I imagine we're looking at a 7-8% discount; not really a head turner is it.
 


El Presidente

The ONLY Gay in Brighton
Helpful Moderator
Jul 5, 2003
39,689
Pattknull med Haksprut
It's just a cheap PUBlicity stunt.

Prices for eating and drinking out are hugely inflated by the chains that own them as a rule, especially on soft drinks.
 






beorhthelm

A. Virgo, Football Genius
Jul 21, 2003
35,265
Prices for eating and drinking out are hugely inflated by the chains that own them as a rule, especially on soft drinks.

Aye. i have alot of sympathy for the complaints, especially when i hear Tim Martin who puts his money where his mouth is and offers good value (even if many like to deride the Wetherspoon brand). Many others in the industry dont do themselfs many favors. not just soft drinks, i've never understood why they feel the need to charge over double (by volume) for bottles. i suppose the silly punter has to share some of the blame.
 


Bob!

Coffee Buyer
Jul 5, 2003
11,062
Wouldn't be good for obesity rates in this country, encouraging people to eat more!
 


Fef

Rock God.
Feb 21, 2009
1,727
The cynic in me says that it's just a ploy to increase profits. Greedy barstewards that they are.
 





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