VAT change could cost pub sector £36m to revamp menus and tills

The 2.5 percentage point cut in VAT could cost the UK pub industry as much as £36m just to re-print menus and re-programme tills, the Association of Licensed Multiple Retailers (ALMR) warned today.

The VAT cut, announced in Monday's Pre-Budget Report, comes into effect on December 1 meaning that licensees have had just six days to reconfigure their systems.

A survey of ALMR members shows that they will be expecting to pay some £570 per pub to make the changes. Extended across the sector, this means the pub industry could be forking out anywhere between £10m and £36m.

ALMR chief executive Nick Bish said the cost was a particularly bitter pill to swallow for licensees as beer duty has been increased to cancel out the fall in VAT.

"Publicans up and down the country have faced a week of chaos just because it has been decided that 1 December is a nice neat date to implement the changes," he said.

"The biggest irony is whilst they have to re-configure their tills and reprint their menus they will be practically the only group who won't benefit from Alistair Darling's tinkering with VAT; the alcohol duty rise will swallow up any customer benefit."

Alex Salussola, chairman of Glendola Leisure and ALMR president, added: "There seems to be a complete lack of understanding from Whitehall not only about the practical changes that need to be made, but also the time needed for publicans to understand the cost implications and fit them into the business planning."

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By Daniel Thomas

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