Pub giant JD Wetherspoon has announced a one-day price reduction on food and drink this week, aiming to spotlight a significant tax "disparity" between the hospitality sector and supermarkets.
The company, which operates 794 establishments across the UK and Ireland, will implement a 7.5 per cent cut on Thursday September 18.
Wetherspoons stated the move intends to demonstrate to both the Government and consumers the potential benefits of a VAT reduction for the industry.
Tim Martin, its founder and chairman, argued that current regulations mean pubs and restaurants "subsidise" supermarkets.
Currently, UK hospitality businesses, including pubs, restaurants, cafes and bars, have to pay 20 per cent VAT on food and drink sales.
This was reduced during the Covid-19 pandemic but increased from 12.5 per cent to the original rate of 20 per cent in 2022.
However, most food and drink sold by supermarkets to be consumed at home incurs no VAT.
Mr Martin said: “The biggest threat to pubs and the hospitality industry in general is the vast disparity in tax treatment among pubs, restaurants and supermarkets.
“This tax benefit allows supermarkets to subsidise the selling price of beer.
“Pubs have been under fantastic pressure for decades, because of the tax disadvantages which they have with supermarkets.
“A VAT cut to 12.5 per cent is needed to ensure that pubs, bars and restaurants do not continue to close, but instead thrive, invest and create new jobs.
“We call on the chancellor to create tax equality.”
Kate Nicholls, chairwoman of UKHospitality, said: “A reduced rate of hospitality VAT across the UK means lower prices and more jobs, leading to the regeneration of our high streets and communities.”
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