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Wetherspoons fights unsustainable tax rises

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9th May 2012
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JD Wetherspoon said that its tax bill has increased by more than £50m in the past financial year as the pub chain criticised “unsustainable” tax rises that are hurting the pub industry and UK economy.

In a trading update announced on 2 May, JD Wetherspoon, which has more than 800 pubs across the UK, said the pub industry “was burdened with considerable additional taxes” after the March Budget.

Tax changes in excise duty; in allowances for fruit/slot machine taxation and the introduction of a late-night levy, “in effect another tax which will also cost approximately £2 million per annum” will increase Wetherspoon’s tax costs, it said.

The total tax bill for Wetherspoon in the current financial year, including VAT, excise duty, corporation and other taxes will be £500m, about a £50-million increase, compared with the previous financial year, it said.

“We have also created approximately 3,000 jobs in the same period, but all of the economic benefits of our expansion are currently being levied by the government as taxes - an unsustainable situation.”

Pub companies including Fuller’s, Robinsons, Shepherd Neame and Thwaites, for example, have urged the government to reduce VAT for the pub industry in order to help companies create jobs and generate additional taxes.

JD Wetherspoon also companied about the “disparity” in tax rules for pubs and supermarkets “whereby pubs pay 20% VAT on food sales, while supermarkets pay virtually nothing, is bad for jobs and taxes.”

The overall level of taxes and the disparity with supermarkets have “greater economic effect in less affluent parts of the UK,” JD Wetherspoon said. This means that the majority of prominent pub and catering companies are investing in the southern part of the UK and in major town and city centres elsewhere, “contributing to serious economic problems for many high streets in Britain and Northern Ireland,” it said.

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