Attack on tax
Wetherspoon: ‘Monty Python’ Vat plan forces up prices
Wetherspoon says tax policy is inconsistent
Pubs chain Wetherspoon has criticised the government’s VAT regime for favouring supermarkets over pubs and said the restoration of the higher rates from September will result in Wetherspoon having to increase food prices by around 40 pence per meal.
The VAT rate was cut to 5% last year but will return to 20% in stages.
“The VAT rise will make the entire hospitality industry less competitive vis a vis powerful supermarkets,” it said in an update, noting that supermarkets pay zero VAT on food.
Referencing the 1970s comedy sketch featuring a spoof Robin Hood, the company said: “For many years, UK governments have therefore behaved like Monty Python’s Dennis Moore – who robbed the poor (in this case pubs and restaurants) to help the rich (supermarkets).”
Wetherspoon repeated its plan announced in March to create 20,000 jobs in a £750m investment over ten years.
The company said it remains in a sound financial position. Net debt was £865 million on 4 July 2021 and is expected to be around £833 million at the end of this financial year.
Wetherspoon has received covenant waivers, up to and including the quarter to July 2021.
The normal EBITDA-related covenants have been replaced with a minimum liquidity threshold of £75 million.
Chairman of Wetherspoon, Tim Martin, said: “The company continues to expect to make a loss for the year ending 25 July 2021.”