Tim Martin hits out at proposed VAT increase

The Wetherspoon chairman has criticised the government proposal to increase VAT to 20% next month.

Wetherspoon chairman Tim Martin has criticised the government proposal to increase VAT to 20% next month in respect of food in pubs, restaurants and cafes.

The open criticism comes ahead of the Spring Budget, which is set to be revealed by chancellor Rishi Sunak on Wednesday 23 March.

“It doesn’t make economic sense that food bought in pubs, restaurants and cafes attracts VAT of 20%, when food is VAT-free in supermarkets," says Martin, who has regularly highlighted the comparative disparities between the two markets. 

“Pubs, restaurants and cafes form integral parts of high streets, whereas supermarkets are often in edge-of-town or out-of-town locations. Favouring supermarkets over pubs is bad for high streets and town centres."

Martin went on to say that it is an accepted principle of taxation that it should be fair and equitable, treating businesses that sell similar products in a similar way.

“Tax discrimination creates economic distortions," he says. “Supermarkets have clearly used their favourable tax treatment to subsidise the price of beer, wine and spirts over recent decades.

“Pubs, restaurants and cafes play an important role in the social fabric of the nation, as well as generating employment and vast amounts of taxes for the Treasury. The hospitality industry understands that governments need tax – but there should be a sensible rebalancing, so that all businesses selling similar products  are treated in the same way.”

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