Wetherspoons boss urges Rachel Reeves to reform VAT and business rates

The boss of Wetherspoons has called for simplified taxes on pubs to protect the ‘social fabric of the nation’.

Tim Martin, who founded the pub giant in 1979, yesterday became the latest business voice to tell the Chancellor hospitality businesses pay ‘wildly excessive taxes’.

Mr Martin, who has long been a critic of how supermarkets are taxed compared to pubs, said venues are disadvantaged by a ‘perverse’ tax system.

And he joined a chorus of bosses to ask Labour to provide respite for the sector through tax reforms at the upcoming Budget on 26 November.

He said supermarkets and pubs should be charged the same rate of VAT and business rates to encourage punters to drink at venues instead of at home.

In a plea published on the London Stock Exchange news service, the 70-year-old said: ‘This tax disparity is harming businesses and high streets, but also the social fabric of the nation – where, other than pubs, can you temporarily escape the attentions of your own family?

Tim Martin has long been a critic of how supermarkets are taxed compared to pubs

‘A consequent anomaly is that food for posh dinner parties in Notting Hill or the Cotswolds is VAT-free, whereas fish and chips at your local pub attracts the full 20 per cent. Just ask Jeremy Clarkson.’

The hospitality industry was hit by a £500million increase in business rates in April alongside a barrage of other costs imposed by Labour. That included the national insurance hike and a sharp increase in the minimum wage.

It has been revealed that some 89,000 jobs in the sector have been axed since Rachel Reeves’ Budget last October, according to analysis of official figures by UK Hospitality.

In particular, Mr Martin takes issue with the 20 per cent VAT rate charged on food sales at pubs and restaurants. As supermarkets pay nothing, he says they can effectively ‘subsidise the selling price of beer, wine and spirits’.

He added: ‘It’s a basic principle that taxes should be fair and equitable. All we’re asking for is equality with supermarkets, which are doing an excellent job for their customers – the same rate of VAT and the same business rates per pint.’

And he claims pubs pay nearly 20 times more in business rates – which are a commercial levy charged on brick-and-mortar firms – than grocers.

Mr Martin said the sector had made a ‘strong case’ that the multiplier rate paid by hospitality businesses should be reduced, resulting in lower bills for hard-up venues.

Ms Reeves is facing building pressure from High Street bosses over her proposed rates reforms, which are theoretically designed to level the playing field between bricks-and-mortar businesses and online rivals.

But she has angered big supermarkets by increasing taxes for larger premises, with grocers arguing the changes will also hit ‘anchor’ stores that draw in shoppers to other businesses.

Retailers fear around 4,000 shops could be forced to pay higher rates.

There are also worries that the Budget’s timing will weigh on already dire consumer spending in the ‘golden quarter’ – the run-up to Christmas.

Kate Nicholls, chair of UKHospitality, said: ‘Hospitality businesses all agree that the current business rates system is completely broken and unjustly penalises bricks and mortar businesses, like those in hospitality.

‘Reforming the system to level the playing field is the right thing to do and I’m pleased that the Government has legislated to do just that.

‘Now, it must follow through on its commitments by introducing the maximum possible business rates discount for hospitality businesses, which will deliver lower bills for pubs and hospitality.’

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