Mick Dennison column: Eating out market needs a tax break

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Working in the hospitality industry it doesn’t take long to realise there is a massive disparity with supermarkets when it comes to prices, marketing and most of all tax.

People buying food in pubs and restaurants are paying 20 per cent VAT, compared with zero in the supermarket – the eating out market needs a cut.

There is a push headed by veteran VAT campaigner Jaques Borel to get the government to cut the level of VAT in the hospitality industry from 20 per cent to five per cent and he is planning a day of national action.

A group called The VAT Club JB with supporters including Wetherspoons, Heineken, Punch Taverns, Pizza Hut and various family brewers are organising a Tax Parity Day across the UK on September 25. They are calling on 10s of thousands of publicans, restaurateurs and food service operators to reduce their prices by 7.5 per cent for one day only.

In a large number of European countries, Jaques Borel has already campaigned effectively for the level of VAT in the hospitality sector to be reduced. An example quoted is that if a family of four eat out on Tax Parity Day, the total price of a meal and drinks would be reduced from let’s say £60 to £54.60.

It is also estimated that a cut in VAT now would create an additional 600,000 jobs over the next three years but even more significant is the fact that last year, the pub and bar industry generated one in eight of all new jobs in the UK. In France, a tax reduction from 19.6 per cent to five per cent led to the creation of 225,000 jobs in the first year alone.

Pubs are beleaguered with tax and legislation so this campaign could kickstart some economic growth and help landlords get their businesses and local communities regenerated. Walk down any prosperous high street, with few or no empty shops, and you will find a high percentage of successful cafes, restaurants and pubs all creating jobs and taxes – can we say that of our own town?