For sake of pubs call time on unfair tax system that favours superstores
IN the UK, there is a huge gulf between how pubs and other hospitality and leisure businesses are taxed as compared to supermarkets.
Pubs have to charge their customers 20% VAT on meals whereas similar packaged products in supermarkets are zero rated. As for drinks, Tim Martin of JD Wetherspoon estimates that business rates add around 20p to the price of a pint in a pub while the equivalent figure for supermarkets is approximately 2p.
On top of that, the VAT and duty on a pint in the pub is significantly higher than on the same product purchased in the supermarket.
Supermarkets have been able to use this tax advantage to subsidise the price of their beer, wine and spirits to the detriment of pubs, making supermarkets massively cheaper for the same products.
The entirely predictable consequence is the large numbers of pub closures in recent years. While the pandemic caused a lot of pubs to shut up shop, it was merely accelerating an already existing trend because while hospitality businesses had to close, supermarkets remained open and consequently were able to increase their market share significantly.
In Britain and Ireland, our pub culture provides a social melting pot at the heart of our communities, in a way that is unusual elsewhere in the world. This is all at risk because of the badly skewed tax regime that successive governments have failed to address.
As Tim Martin points out, tax equality will result in more investment in our high streets at a time when shops are closing in large numbers due to the continuing increase in online shopping.
Tax equality would lead to more pubs, bars, cafes and restaurants opening up which would contribute towards maintaining our town centres as focal points of the communities they serve. Increased employment opportunities would result and, in the long term, more tax collected for the Treasury.
The campaign for tax equality is not new. What is surprising is for the last thirteen years, the party of government in the UK is one that prides itself on its commitment to low taxation. For the sake of our pubs it must surely be time to convert soundbite slogans into action.
The national CAMRA website is at: camra.org.uk. or your local CAMRA website covering Southport, Merseyside and Ormskirk, West Lancashire is at: southport. camra.org.uk.