5% VAT in pubs (and the hospitality sector)??

[Aqualung]

Does anyone understand Tim Martin's argument that VAT on pubs and restaurants should be reduced to 5%?

I notice that he doesn't seem to be including take aways in this argument. He claims the fact that supermarkets pay zero VAT on food is allowing them to subsidise cheap booze, which to me is utter nonsense. Food in supermarkets is uncooked so if he wants to level the playing field maybe he could put a microwave oven on every table so that people can ping and fling their meals and avoid the VAT.

I can't imagine he is including VAT on drinks in this argument as that would never stand a chance of getting implemented by any shade of government.

Does anyone seriously believe that a supermarket would sell bottles of beer at a loss? This campaign is supported by Fullers who charge as I understand it over £4 a pint for ESB in most of their pubs. This is the same company that sells their ESB to Tesco that allows them to sell on offer 4 for the price of 3 at under £6!! Wells are the same and as for Heineken I really don't care!

The trouble with having a 5% VAT rate for food in pubs etc is that it would apply equally to KFC and Big Mac (which would upset the food police) as well as fine dining establishments which would upset most people.


My personal opinion is that VAT and excise duty should be scrapped on all beers produced by a small brewery (and it's far too late for me to think of a definition of one!).

[NickDavies]

Does anyone understand Tim Martin's argument that VAT on pubs and restaurants should be reduced to 5%?

I notice that he doesn't seem to be including take aways in this argument. He claims the fact that supermarkets pay zero VAT on food is allowing them to subsidise cheap booze, which to me is utter nonsense. Food in supermarkets is uncooked so if he wants to level the playing field maybe he could put a microwave oven on every table so that people can ping and fling their meals and avoid the VAT.

I can't imagine he is including VAT on drinks in this argument as that would never stand a chance of getting implemented by any shade of government.

Does anyone seriously believe that a supermarket would sell bottles of beer at a loss? This campaign is supported by Fullers who charge as I understand it over £4 a pint for ESB in most of their pubs. This is the same company that sells their ESB to Tesco that allows them to sell on offer 4 for the price of 3 at under £6!! Wells are the same and as for Heineken I really don't care!

The trouble with having a 5% VAT rate for food in pubs etc is that it would apply equally to KFC and Big Mac (which would upset the food police) as well as fine dining establishments which would upset most people.


My personal opinion is that VAT and excise duty should be scrapped on all beers produced by a small brewery (and it's far too late for me to think of a definition of one!).

Lots of countries (even Ireland) have reduced rates of VAT on hotel accommodation and restaurant meals. http://www.vatlive.com/vat-rates/eur.../eu-vat-rates/

[Farway]

I have zero experience of reduced rate VAT in other countries, but I wonder did the price to punters go down or did the pubs / hotels just trouser the difference, which seems to have happened with the 1p cut in beer duty

[NickDavies]

I have zero experience of reduced rate VAT in other countries, but I wonder did the price to punters go down or did the pubs / hotels just trouser the difference, which seems to have happened with the 1p cut in beer duty

Many countries have always had lower rates on services than goods, not just hospitality but transport and entertainment. Mainly I think because it's seen as a tax on employment rather than on the change of ownership of something more tangible.

[Aqualung]

I had a quick read of Tim Martin's pamphlet today and see that he is just talking about food. His comparison with supermarket food is totally disingenuous as they sell food that needs to be cooked (or microwaved) at home and his theory that the supermarkets are selling food at 0% VAT to subsidise cheap booze is complete nonsense.

Before VAT was introduced, if I remember rightly there was something called Purchase Tax, which again going by an addled memory was mainly directed at luxury items. UKIP supporters will probably be delighted to hear that VAT was introduced to come into line with the Common Market, so maybe they will pledge to scrap it and raise Income Tax to cover the deficit?

As I see it the 0% and 5% VAT rates are there for life's essentials like food and power (why newspapers are included is beyond me, surely it could never be a case of politicians not wanting to upset the press barons?).
Eating out is a luxury and the difference in cost between getting a takeaway or having a cheap meal in a Spoons and having a fine dining experience in a swanky restaurant is massive so making the whole industry 5% VAT would hardly be a fair thing to do.

HOWEVER, Tim Martin does explain his case for creating jobs well and despite the fact that other countries have gone for this I can't see it happening here.