Saturday, 9 September 2017

Glorious bit of misreporting by The Daily Mail

They've really come up trumps this time:

Wetherspoons is set to slash prices on all of its food and drink for one day only in a bid to convince the Government to lower booze taxes. The pub chain is well known for its cheap pints but it is knocking off a further 7.5 per cent as part of the protest.

It is one of thousands of businesses across Britain supporting Tax Equality Day on Wednesday September 20th.

Under UK law pubs and restaurants are forced to charge 20 per cent VAT on food and drink - but supermarkets do not have to do the same. This allows Tesco and its rivals to sell alcohol at a much lower price, encouraging drinkers to stay at home to socialise with friends rather than go out.

Tim Martin is an astute bloke, and realised long ago that it's not booze duty that puts pubs/restaurants at a price disadvantage to supermarkets (because booze duty applies at the same rate per pint whether it is sold in pubs or supermarkets).

It is the VAT which really hurts pubs/restaurants, which being ad valorem, adds far more to the price of a pint in the pub (about as much again as booze duty) as it does to the price of supermarket booze.

VAT is also slapped on everything, i.e. all the food and soft drinks they sell (food in the supermarket is VAT zero-rated, not sure about soft drinks but the ad valorem point applies here too). I think this is one of the reasons he supported Leave - VAT is imposed by the EU.

For some reason The Mail assumes that supermarkets do not have to charge VAT on booze, which is addle pated nonsense of course, thus completely messing up the point which Tim Martin is trying to make.


Rich Tee said...

In the latest edition of the Wetherspoons magazine, Martin has very generously given several pages for several experts to argue in favour of staying in the EU (Martin is opposed to it).

Not just discussing politics in the company magazine, but actually allowing space for his opponents. Treating his customers like adults.

Hats off to the bloke. It is tempting to say "he should be in politics" but it is probably better that he stays out of it.

Bayard said...

Thanks to Lidl telling you which of the items you have bought are VATable and which aren't, I am pretty certain that all drink is standard rated, with the possible exception of water.

Mark Wadsworth said...

RT, I like him more all the time.

B, good point, thanks for checking.

Shiney said...


'Soft' drinks do indeed attract VAT.

Mark Wadsworth said...

Sh, I thought so, but it seemed a minor point and I couldn't be bothered checking.

Jonathan Bagley said...

Isn't it that once the UK gov puts vat on something, the EU stops us reducing the rate. For example, vat on domestic energy. We can't reduce the rate, but the EU didn't impose vat on it originally?

Mark Wadsworth said...

JB, short answer = yes.