Pubs Cutting Prices in Tax Protest
September 24, 2014 Taxation in UK
LONDON – Pubs across the UK are cutting prices for a whole day as part of a campaign calling for the reduction VAT rates on businesses in the hospitality industry.
On September 24th more than 15 000 pubs and restaurants across the UK will reduce prices by 7.5 percent, as part of the Tax Equality Day campaign to reduce the rate of VAT in the UK.
The campaign was launched by the VAT Club, an independent body representing the hospitality industry, which claims that reducing the rate of VAT in the UK will lead to a wealth of economic and social benefits in the country.
According to the experts of the VAT Club, the hospitality industry employees at least 2 million people in the UK, and accounts for one in eight new jobs, and one in six of every job held by people aged between 18 and 24.
The results of analysis conducted by the VAT Club indicate that any cut to VAT rates will directly lead to cuts in prices and an increase in salaries, with 60 percent of the cut diverted to price slashes, while 10 percent would flow to salary hikes, and 5 percent and 20 percent flowing to training and investment, with the remainder becoming extra dividend payments.
In its analysis the VAT Club acknowledged that the VAT cut would result in a reduction in the amount of collections of VAT, but noted that the uptake in business activity across the hospitality industry would lead to growth in the collection of personal income tax and corporate income tax.
Photo By: David Blaikie