Most pubs are not passing VAT cut on to customers

HUNDREDS of pubs are refusing to pass on the VAT cut on food and soft drinks to customers, a survey has found.

The research by HIM/MCA Insight found that the majority of hospitality businesses will not be passing on the discounted rates.

Rishi Sunak, the Chancellor, announced earlier this month that VAT on food and non-alcoholic drinks would be cut from 20 per cent to 5 per cent until January 2021 in a bid to help businesses and consumers during the pandemic.

The pub chain Wetherspoons and takeaway firms including KFC and Pret have already announced that they would be passing on the tax cut to customers in full.

However, the polling of 163 pubs showed that 137, or 84 per cent, said they would not be cutting prices for visitors, according to the Morning Advertiser, a trade magazine.

The publication reported that of the 26 pubs that will pass on the discount, eight would pass on the full 15 per cent, 10 would give 5 per cent to 7.5 per cent, six would offer 8 to 14 per cent, while four would give less than 5 per cent.

It came after the Government confirmed it wanted to see businesses passing on the benefits of its VAT cut to customers wherever possible. a Treasury spokesman told the Morning Advertiser: “We want businesses to pass on the benefit to customers if they can and almost four in five businesses said they did so back in 2008.

“But we recognise many of these businesses have been closed and without income for months, and decisions on prices are ultimately for businesses rather than the Government.”

Following its price cuts, the cost of a pint of bitter at the majority of Wetherspoon pubs is just £1.29, while the price of a breakfast was cut by an average of 41p to £3.49.

The survey also revealed that some hospitality businesses will demand deposits to secure bookings from customers.

A total of 16 per cent of businesses said they would bring in deposits to cut the number of no-shows.

Tom Kerridge, the celebrity chef, has previously said customers booking tables and not showing up are putting jobs and businesses at risk.