Currently in the UK, hospitality businesses are charged 20% VAT on all sales of food and beverages, whereas supermarkets pay virtually no VAT on food sales. Restaurants and pub operators, including many British family brewers and ‘JD Wetherspoons’, have joined forces to campaign to lower VAT for the hospitality sector from 20% to 5%.
The campaign is being headed up by Jacques Borel who has been successful in similar campaigns across Europe in countries like Belgium, France, Germany & Sweden. The aim of the campaign is not only to create parity between the level of VAT paid by supermarkets and hospitality businesses but also to help boost economic growth and employment.
A major initiative of the campaign is the ‘Tax Parity Day’ which was organised for Wednesday 24th September 2014. On that day, companies supporting the campaign will be reducing their prices by 12.5%. This represents the amount prices are expected to fall if VAT in the hospitality sector were cut from 20% to 5%. The assumption is that 60% of the reduction would be passed onto the guest.
Anthony Woodhouse comments “We are delighted to once again join other regional family brewers, pub operators and restaurants in supporting the hospitality sectors Tax Parity Day in 2014. This day isn’t so much about getting people through the door because of an attractive discount; it’s making our guests aware of the tax differential for food in pubs versus supermarkets and other retailers. The positive benefits of a cut in VAT from 20% to 5% would boost economic growth through increased sales and boost employment by creating hundreds of thousands of jobs across the sector.”