Wetherspoons has announced that it will have to increase its meal prices by around 40p per meal if the VAT cut for the hospitality industry is not extended.
The tax on food sold in pubs was reduced from 20% to 5% during the pandemic to help struggling businesses, but in stages over the next 12 months, it’s set to return to normal levels, with a rise to 12.5% in September 2021.
A spokesperson for Wetherspoons said it would "make the entire hospitality industry less competitive". The Treasury said it had supported pubs in many ways, including through the furlough scheme, VAT cut and business rates relief.
Wetherspoons stated that taxes should be “fair and equitable” and added that despite their much higher profits, supermarkets pay zero VAT on food, but pubs and restaurants pay 20%, in normal circumstances.
It is expected that the 860-sitepub chain will implement price rises from September.