Written by: Keith Tully
Reviewed: Friday 10th March, 2017
The tax burdens faced by pubs throughout the UK are threatening the survival of the entire industry, according to the boss of one of the largest pub chains in the country.
Tim Martin, chairman of JD Wetherspoon, took the opportunity of his company’s latest trading update to issue a scathing response to the government’s recent Budget announcements and highlight his concerns about the pub industry’s prospects.
“The biggest danger to the pub industry is the continuing tax disparity between supermarkets and pubs, in respect of VAT and business rates,” he said.
“We understand the need for the government to raise taxes. However, there should be a sensible rebalancing of the taxes paid by pubs and supermarkets, if the pub industry is to survive in the long term.”
Mr Martin went on to dismiss the chancellor of the exchequer Philip Hammond’s claim that tax reliefs for pubs will save them each £1,000 if they have a rateable value of less than £100,000.
“In fact, that sum is dwarfed by tax and regulatory increases,” he said, explaining that he expects to see JD Wetherspoon’s overall business rate bills increase by around £7 million next year and its electricity taxes to rise by around £4 million.
Mr Martin highlighted some of the differences between the tax burdens faced by pub owners as compared with supermarket operators, who he suggests have been given a much easier ride by the current government.
“In effect, this was a budget for dinner parties, no doubt the preference of the chancellor and his predecessor - dinner parties will suffer far less from the taxes outlined above, whereas many people prefer to go to pubs, given the choice,” he said.
The pub chain boss also said that the so-called ‘sugar tax’ being introduced by the government will add considerably to the tax burdens of pubs throughout the country and could further add to the challenges they face in remaining viable as businesses.
Despite now being “cautious about the second half of the year”, JD Wetherspoon was able to increase its revenues by 1.4 per cent and its pre-tax profits by 42.8 per cent in the half year up to January 22nd 2017 as compared with the same period of the previous year.
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