Wetherspoons founder urges Reeves to equalise VAT and business rates for pubs
Tim Martin urges Chancellor Rachel Reeves to reform tax treatment of hospitality ahead of November Budget as industry faces higher costs and job losses
The founder of pub chain Wetherspoons has urged Chancellor Rachel Reeves to overhaul the tax treatment of pubs, saying a perceived disparity with supermarkets is harming hospitality and the wider high street.
Tim Martin, who started Wetherspoons in 1979, called on the government to apply the same rates of value-added tax and business rates to pubs and supermarkets in a plea published on the London Stock Exchange news service. He asked for changes ahead of the government’s Budget on Nov. 26, saying the current system disadvantaged venues that serve food and drink on site.
Martin, 70, reiterated long-held criticisms that supermarkets pay lower tax on food than hospitality outlets. He highlighted that meals at supermarkets generally attract no VAT while food sold in pubs is subject to the full 20% rate, and argued supermarkets can thereby undercut on-site outlets on the price of beer, wine and spirits.
"This tax disparity is harming businesses and high streets, but also the social fabric of the nation," Martin wrote, adding: "It's a basic principle that taxes should be fair and equitable. All we're asking for is equality with supermarkets." He also said hospitality firms had made a "strong case" for reducing the business rates multiplier that determines bills for brick-and-mortar operators.
The hospitality industry has faced a raft of cost pressures this year. In April it absorbed a roughly £500 million increase in business rates alongside higher employer national insurance contributions and a sharp rise in the National Living Wage. Industry body UKHospitality said an analysis of official figures indicated roughly 89,000 jobs in the sector have been lost since last October’s Budget.
Martin also criticised the current business-rates settlement as skewed toward grocers, saying pubs pay many times more per premises. Those figures are disputed by other sectors that say recent government reforms are intended to level the playing field between physical stores and online competitors.
Chancellor Reeves has faced mounting pressure from High Street operators over her proposed rates reforms. The changes are aimed, according to ministers, at correcting distortions that favour online retailers. However, some large supermarket chains have warned the measures will increase bills for larger stores that serve as anchor tenants, and trade groups representing retailers have cautioned that thousands of shops could face higher charges.
Kate Nicholls, chief executive of UKHospitality, said the business rates system was "completely broken" and urged the government to deliver the "maximum possible business rates discount for hospitality businesses," arguing such measures would lower bills for pubs and other venues.
The Treasury has not published a full response to Martin’s LSE statement. With the Budget scheduled for late November, hospitality leaders are pressing for tax changes they say would support footfall during the crucial autumn and holiday trading period and help stabilise jobs on the high street.