Day of action next week will see businesses, including JD Wetherspoon and Punch Taverns, lower their prices by 7.5% in support of proposed VAT cut
As many as 15,000 restaurant and pub businesses are expected to take part in Tax Parity Day next week on 25 September, with the majority lowering prices by 7.5% in support of a campaign to cut VAT for hospitality businesses.
The day is being organised by veteran French lobbyist Jacques Borel, who has signed up 44 pub, restaurant, hotel and foodservice firms to support his calls for a cut in VAT on food served in the hospitality sector from 20% to just 5%.
Borel and his fellow campaigners hope that the day will highlight what they see as the unfairness of the current system, where supermarkets pay 0% VAT on food.
He told Caterer and Hotelkeeper that at least 10,000 businesses, 40% of which are estimated to be restaurants and another 60% of which are pubs, were ready to take part in Tax Parity Day, including managed pub giant JD Wetherspoon. Others, such as Enterprise, Punch Taverns and Fuller's,
The businesses are cutting prices by 7.5% because it equates to passing on around 60% of the tax cut they are campaigning for. The other 40% would be used for wider benefits such as higher wages and investment in facilities.
"If we compare with what has happened in Germany, Finland, Belgium and France, if you make a 7.5% price cut, you will have 25% more clients, which is very significant," Borel said.
He admitted that the Treasury was no more receptive to the VAT cut than when he first started calling for one. More visits to ministers are planned, as well as a briefing session held by Borel himself and JD Wetherspoon chairman Tim Martin to 10-15 political journalists in Brighton, just as the Labour Party Conference there draws to a close.
Borel said: "The more objections we have, the better off we are. We don't fear objections - in my experience it is when objections are surfacing that you start to convince people."
Martin used the publication of his firm's annual results to hit out once again at the UK's tax regime. "It is unsustainable to have far higher taxes for the pub industry than those for supermarkets," he said. "Already, 10,000 pubs have closed and many others are suffering through insufficient investment. In particular, there should be VAT equality for pubs, restaurants and supermarkets."