A Perth pub is slashing the price of its food and non-alcoholic drinks in protest against an upcoming increase in VAT for the hospitality industry.
The Capital Asset on Tay Street is taking part in the action to mark Tax Equality Day on Thursday, September 23.
All food and drink in pubs is currently subject to five per cent VAT as a result of the tax being cut by the chancellor in July 2020.
However, this will change on October 1, when the VAT rate will rise to 12.5 per cent, with the government’s aim of returning VAT to 20 per cent, in stages, in 2022.
Wetherspoon, which owns The Capital Asset, has criticised the fact supermarkets pay zero VAT on food, and are able to use that saving to sell alcohol to its customers at a discounted price.
The Capital Asset manager Laura Billingham said: “It is unfair that supermarkets pay zero VAT on food, but pubs and restaurants, in normal circumstances, pay 20 per cent. Pubs have been under fantastic pressure for decades due to the tax disadvantages it has with supermarkets.
“Customers coming to The Capital Asset on Thursday, September 23 will find the price of their food and non-alcoholic drink is lower than normal.
“However, as a result of the VAT increase to 12.5 per cent on October 1, we will have to increase food prices. Therefore, on Wednesday, September 29, we will increase prices on our meals by 50p.
“We urge the chancellor to create tax equality between pubs and supermarkets by making the current VAT regime for pubs permanent.”
