JD Wetherspoon chairman Tim Martin made a pre-Budget plea for politicians to help create a “level playing field” with supermarkets on taxation as he unveiled half-year results.
The pub giant saw pre-tax profits rise 3.2 per cent to £36m for the six months to January 26, but Mr Martin warned taxation costs were expected to rise and said the group would face tougher comparisons from a year earlier in the second half. He said pubs were at a disadvantage as supermarkets do not have to pay VAT on food sales and are effectively able to subsidise alcohol prices.
He added that pubs also pay higher business rates per pint, while they have been additionally hit by a “late-night levy” to contribute towards policing costs and new fruit machine taxes.
His fresh call for reform comes ahead of Chancellor George Osborne’s Budget statement on Wednesday.
Responding to Mr Martin’s comments, a Treasury spokesman said: “This Government’s priority is to tackle the record budget deficit in a decisive but fair way, to restore confidence in our economy and support the economic recovery.
“We are unconvinced of the economic case for a VAT rate cut for restaurants and catering. For all catering services (the supply of meals, alcohol, snacks and drinks) sold by restaurants, pubs, cafes and canteens, a reduced rate of VAT would have a significant cost to the Exchequer that would have to be met, either from increasing other taxes or from increased borrowing.
“This would either have an adverse impact on growth or risk raising interest rates, which would undermine the recovery and have an adverse impact on families and small businesses, including businesses in the restaurant and catering sector.”
Wetherspoons plans to open 12 new pubs in Yorkshire in the near future.
Altogether, Wetherspoons has 65 pubs in Yorkshire which employ between 2,500 and 3,000 people.
Wetherspoons opened pubs in Whitby, Selby, Yeadon, Sowerby Bridge, Hemsworth and Chapeltown last year. The group has identified new sites in Wakefield, Beverley, Bramley, Saltaire, Malton, Morley, Headingley, Leeds, Sheffield, Northallerton, Pontefract and Holmfirth.