Financial News

  • 16 March 2014, 21:30

JD Wetherspoon Urges Supermarket VAT Parity

Just days before the Chancellor announces his new Budget, pub chain JD Wetherspoon has made another call for tax reform to create a level playing field between pubs and supermarkets.

The plea comes as the group reported first-half profit of 36m, up 3.2% compared to the same period last year.

Revenues for the group, which runs more than 900 pubs, were 683.2m, up 9.1%.

It now has plans in place to open dozens more pubs each year over the next decade, and intends to launch a division in the Republic of Ireland.

"The pub industry as a whole has lost 10,000 pubs, although we have done quite well," Wetherspoon chairman Tim Martin told Sky News.

"But you have to look at the big picture and there is no rational argument for supermarkets paying much lower levels of tax than pubs, and I think people are beginning to accept that.

"It's very bad for high streets, pubs and cafes if there is a differential tax between two types of businesses."

It said the greatest disparity is in VAT, as supermarkets do not pay it on food but pubs and cafes are hit with a 20% rate.

Wetherspoon suggested this allowed supermarkets to "subsidise their alcoholic drinks".

It added pubs pay around 15p per pint in business rates while supermarkets pay no more than 2p per pint.

The company also said it currently pays 26% corporation tax and said its tax rate is higher than the standard UK rate.