Cheap pub chain Wetherspoons launched a scathing attack on the government’s “inequality” when it comes to taxing pubs versus supermarkets and restaurants.
It even says it is killing of the pub industry.
Wetherspoons revealed to today, in its results it for
the 52 weeks ending July 26, that revenue rose by 7.4% to £1.514 billion ($US2.34 billion) and like-for-like sales increased by 3.3%. However, profit before tax slumped by 2% and the group blames the government’s taxation pub food and the impending hike in the National Living Wage for the environment.
Tim Martin, the Chairman of J D Wetherspoon said in a statement (emphasis ours):
“As we have previously stated, we believe that pubs are taxed excessively and that the government would create more jobs and receive higher levels of overall revenue, if it were to create tax equality among supermarkets, pubs and restaurants.
“Supermarkets pay virtually no VAT in respect of food sales, whereas pubs pay 20% – and this disparity enables supermarkets to subsidise their alcoholic drinks sales to the detriment of pubs and restaurants. Wetherspoon is happy to pay its share of tax and, in this respect, is a major contributor to the economy.
“In the year under review, we paid total taxes of £632.4m, an increase of £32.2m, compared with the previous year, which equates to approximately 41.8% of our sales. This equates to an average payment per pub of £673,000 per annum or £12,900 per week.”
Wetherspoons runs 800 pubs across Britain and also serves food from breakfast to dinner for those on a budget. It added today how pubs have lost 50% of their beer sales to supermarkets in the last 35 years as VAT has jumped from 8% to 20% for pubs.
Currently, supermarkets pay the equivalent of 2p per pint of beer while pubs pay around 15p per pint of beer. It also doesn’t pay VAT on food because it is uncooked.
Wetherspoons also took the time in its results to attack fellow pubs that have failed to back the massive campaign by French fastfood, publican supporter, and businessman Jacques Borel in his campaign to get VAT reduced for pubs:
“Jacques Borel, who has campaigned successfully for lower VAT for bars and restaurants in many other countries, has also been campaigning in this country.
“A large number of companies have supported his campaign, including Heineken, Pizza Hut, Fuller’s and St Austell, among others. It is disappointing to note that some of the biggest pub companies, including Enterprise Inns, Mitchells and Butlers, Greene King and Marston’s have failed to support Jacques’ campaign and have not campaigned themselves in any meaningful way for VAT equality between pubs and supermarkets. ”
Meanwhile, Wetherspoons took a swipe at the government for its impending increase in the amount the poorest workers in the country make through the National Living Wage.
The National Living Wage is intended to pay employees the minimum amount to live a “normal” standard of living. For example, a full-time waitress should be able to live off her low wages and afford rent, food, transport, and bills without having to take a second job or an exceptional amount of extra hours. This will apply to workers over the age of 25.
“Wetherspoon increased the minimum hourly rate for staff by 5% in October 2014 and by a further 8% at the end of July 2015. Both decisions were taken without the knowledge that the government was about to announce a new minimum wage, now called a “the living wage,” said Wetherspoons chairman Tim Martin in the results statement.
“In addition, as Wetherspoon shareholders are aware, we pay about 40% of our profits (£30.7m in the year under review) as a bonus or free shares, over 80% of which is paid to people who work in our pubs. By pushing up the cost of wages by a large factor, the government is inevitably putting financial pressure on pubs, many of which have already closed.
“This financial pressure will be felt most strongly in areas which are less affluent, since the price differential in those areas between pubs and supermarkets is far more important to customers.”
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