Image Source: Gordon Joly
Jane Imrie

Wetherspoon hits out at “Monty Python” government VAT rules as sales decrease

Pub chain Wetherspoon has criticised the UK government for prioritising supermarkets over the hospitality industry.

In a statement issued today (July 7), the company spoke out against the “unfairness” regarding VAT across the two sectors.

The firm stated: “Supermarkets pay zero VAT on food, but pubs and restaurants pay 20 per cent, in normal circumstances. The chancellor reduced VAT on food for the hospitality industry to 5 per cent last year, still above the rate paid by supermarkets, which was nonetheless welcome.

“However, it is now proposed that VAT returns to 20 per cent, in stages, in the next year.The interim rise to VAT of 12.5 per cent, in September 2021, will result in Wetherspoon having to increase food prices by around 40 pence per meal. The VAT rise will make the entire hospitality industry less competitive vis a vis powerful supermarkets.

“For many years, UK governments have therefore behaved like Monty Python’s Dennis Moore - who robbed the poor (in this case pubs and restaurants) to help the rich (supermarkets).”

The comments came alongside a new trading update. Between 12 April and 16 May, when only outdoor trading was permitted, like-for-like bar and food sales were down by 49%. During 17 May to 4 July, sales were down by 14.6 per cent.

For the period from 17 May to 10 June, before the UEFA Euro 2020 football tournament started, like-for-like sales were -8.1 per cent. From 10 June to 4 July, during the tournament, like-for-like sales decreased by 20.8 per cent.

The chairman of Wetherspoon, Tim Martin, commented: “The company continues to expect to make a loss for the year ending 25 July 2021.

“In a trading update of 19 January 2021, the company’s principal ‘scenario’ estimated sales in the financial year starting 26 July 2021 to be in line with financial year 2019, which remains our current best estimate, on the basis that restrictions are ended, as the government currently intends.”

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