Pub and restaurant VAT cut campaign gains pace

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They have joined together to back French hospitality entrepreneur and lobbyist Jacques Borel in his campaign to get VAT reduced from 20% to 5% on food, drink and accommodation in the UK.

Borel successfully battled for the cut in VAT in France that not only led to thousands more jobs in the leisure industry but also saw the government's tax take from the sector actually rise as more people went out.

Tim Martin, chairman of Wetherspoon which is backing the campaign, said: "In the UK, supermarkets have been able to subsidise their alcohol sales on the back of non-VAT food sales.
"We cannot do that in pubs because we have to pay VAT on food.

"It is like clean athletes having to take on drug cheats. The supermarkets have been given steroids by the Government for the last two decades."

Borel's VAT Club is backed by London brewers including Fuller's and Young's, regional ones such as Shepherd Neame and Timothy Taylor, restaurant chains including Pizza Hut, and trade bodies such
as the British Association of Leisure Parks.

Belgium, Germany and Sweden have also cut VAT in the leisure sector. Ireland joined the group
last summer, cutting the tax from 13.5% to 9%.

Borel is targetting a VAT reduction in this country in the 2014 Budget.

JD Wetherspoon today said that same-pub sales rose by 3.6% in the latest quarter after a 1.1% rise in its first quarter.

Martin said this largely reflected the lack of bad weather this year against last, and a buoyant festive period. He added: "It was a boom, boom Christmas and now the mild hangover follows."

The pub chain said that it had already seen a decline in margins between the first and second quarters, and expects to see an even bigger one between the first and second halves of its financial year.

Martin said: "The main challenges for the Company, in this financial year of 53 trading weeks, will be the continuing cost pressures resulting from Government legislation, including further increases to excise duty, business rates and carbon tax."

Wetherspoon shares today dipped 8p to 408.7p.