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Restaurants asked to join VAT 'day of action'

25 | 06 | 13

A campaign to reduce the rate of VAT for the UK hospitality sector to five per cent could gain serious traction with a planned national day of action to promote the cause.

If it goes ahead, Tax Parity Day would take place across the UK on Wednesday September 25th and see pubs, restaurants and foodservice operators reduce their prices by 7.5 per cent for one day only.

The campaign is being run by the VAT Club, the brainchild of veteran VAT campaigner Jacques Borel, who has successfully campaigned for lower VAT rates across Europe.

VAT Club members think that if the hospitality industry reduces its prices for one day, it will highlight the benefits of a VAT reduction to five per cent.

The campaign will be backed with 250,000 posters distributed to venues to highlight the national day of action to their customers.
Some of the industry's leading players are supporting the campaign, including JD Wetherspoon, Punch Taverns, Pizza Hut, Roadchef and Heineken.

'Equal tax treatment'

Jacques Borel said: "Our aim is to secure a more equal tax treatment for food sold through pubs, restaurants and food service operators, compared to supermarkets, which benefit from a zero VAT rate."

Pizza Hut UK chief executive Jens Hofma, said: "We are strong supporters of tax parity. It will create a fairer competitive environment and contribute to the growth of a vibrant going-out environment.

"Most importantly, tax parity will also fuel the creation of jobs, which are broadly accessible and offer huge opportunity for personal and career development in a truly meritocratic sector."

Significant benefits

The VAT Club argues that a lower VAT rate of five per cent would help create jobs and position tourism, pubs, restaurants and catering and hospitality services as a key driver of economic growth. The total number of jobs in the UK hospitality industry currently stands at approximately two million people and provides opportunities for a variety of workers, including young, unskilled and disadvantaged workers.

According to the group, if VAT was reduced, approximately 60 per cent of the reduction would feed through in lower prices, while the other 40 per cent would be allocated to better salaries, training, greater investment and higher profits and dividends.

Mr Borel said that a VAT reduction of 7.5 per cent on Tax Parity Day would see operators increase turnover by as much as 12 per cent, given increased numbers of customers coming through their doors.

Improved competition

A VAT drop would also bring the UK into line with its European competitors - in France and Germany the rate is seven per cent and in Ireland it is nine per cent, for example.

Earlier this year, Malcolm Duck, chairman of the Edinburgh Restaurateurs Association, said practical action would encourage more people to go out and spend money in pubs and restaurants.

"A VAT cut would help the industry significantly," he told the Scotsman. It would lead to more employment and ensure businesses which are marginal but doing nothing wrong could survive and prosper," Mr Duck said.ADNFCR-16001031-ID-801602778-ADNFCR

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