Three pubs are showing support for a VAT reduction campaign by cutting the prices of food and drink next Wednesday.
The JD Wetherspoon pubs will reduce prices by 7.5 per cent in a bid to highlight the benefits a reduced VAT would bring to the hospitality industry.
The King’s Ford in Chingford, The Drum in Leyton and The Walnut Tree in Leytonstone are getting behind Tax Parity Day because the company says reducing the tax would create growth.
Manager of The Walnut Tree Tolu Olaiya said the company-wide scheme was an attempt to reduce a perceived competitive advantage supermarkets currently have over pubs.
“As it is we have big competition with supermarkets, and more people are buying alcohol from supermarkets because they offer cheaper food,” he said.
“We get the wrong end of the stick so we’re hoping to become better competition for them.”
Wetherspoon chairman Tim Martin said: “A reduction in the level of VAT on a long-term basis will generate growth and create jobs in the important leisure and hospitality sector.”
Tax Parity Day, organised by VAT campaigner Jaques Borel, aims at reducing VAT to 5 per cent.
He said in the media that the day would bring a significant boost to sales on the day, as they are expected to rise by 10 to 12 per cent as a result of the cut.
He added that the choice of a 7.5 per cent cut would reflect an average price drop if the VAT were 5 per cent – as some businesses would pass on the full cut to customers while others would choose to pass on less.
All food and drink in pubs is subject to 20 per cent VAT, but Wetherspoon says supermarkets benefit from a zero VAT rate.