Grover and Allen pub in Sudbury to cut prices on Tax Equality Day to support plea for permanent VAT reduction for hospitality industry
A Sudbury pub has called for a permanent reduction in VAT, arguing that the hospitality industry is unfairly treated compared with supermarkets under current arrangements.
The reduced VAT rate of five per cent for food and drink in pubs, announced by the Chancellor in July 2020, will end on October 1.
It will then rise to a transition rate of 12.5 per cent, until March 31, 2022, when it returns to 20 per cent.
However, hospitality businesses have protested against the disparity with supermarkets, which pay far less in VAT and can, therefore, sell alcohol at a lower price.
To highlight this issue and show the benefit of a permanent VAT cut to hospitality, the Grover & Allen in Sudbury has announced plans to cut the price of all of its food and drink for one day on September 23, coinciding with Tax Equality Day.
Matt Coleman, manager of the North Street pub, said: “Pubs have been under fantastic pressure for decades due to the tax disadvantages it has with supermarkets.
"Customers coming to Grover and Allen on Thursday, September 23 will find the price of their food and drink is lower than normal.
"However, as a result of the VAT increase to 12.5 per cent on October 1, we will have to increase food prices.
"Therefore, on Wednesday, September 29, we will increase prices on our meals by 50p.
“We urge the Chancellor to create tax equality between pubs and supermarkets by making the current VAT regime for pubs permanent.”