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Tax Parity Day: Wednesday 25 September 2013

 

We Love VAT campaign Poster

 

Q1:

Why has this price cut been organised?

A1: TAX PARITY DAY has been organised by the VAT CLUB JACQUES BOREL which campaigns to reduce the rate of VAT applying to pubs, bars, restaurants, caterers and hotels.



Q2: Is there a difference between VAT on food in pubs and restaurants and supermarkets?
A2:

Pubs and Restaurants pay 20% VAT on food and drinks whilst Supermarkets pay 0% on food.


 

Q3: What are the consequences of this inequality?
A3:

This allows supermarkets to sell food at a disproportionately lower level than pubs and restaurants, meaning fewer people eating out and supporting the on-trade and the jobs created there.

 



Q4: What impact will a VAT reduction have?
A4:

The first consequence will be a reduction in price for consumers. Based on our surveys prices will fall by around 7.5%. This represents a pass-through of 60% of the decrease in tax. Experience from other European countries, including France, Germany, Ireland and Sweden, suggest an increase of around 10% in customers, requiring additional staff. This is supported by several economic studies. The other 40% will be used for wider benefits such as higher wages and investment.

 


 

Q5: Are there any other benefits of a VAT cut for the sector?
A5:

Many restaurants committed to modernise their pubs/restaurants making them more attractive and investing in new equipment.

 


 

Q6: And what about staff?
A6:

People working in pubs, bars, restaurants, caterers and hotels should enjoy better training and better salaries.

 


 

Q7: What about jobs?
A7:

Greater sales means more jobs – not only in cafés, pubs, hotels and restaurants, but also in the businesses that supply them. Our calculations indicate that up to 670,000 jobs could be created by a VAT cut.

 


 

Q8: Why should taxpayers fund the hospitality sector to the tune of several billion pounds?
A8:

The hospitality sector makes a major contribution to the British economy. It is a sector that can generate jobs fast – more sales = more jobs. We will see the positive impact of a VAT cut within a matter of months. Plus, in reality, the government will recoup most of the cost of the VAT reduction from other taxes generated by the jobs that will be created, increased sales and higher corporation tax receipts. We expect this new revenue will more or less balance out the VAT cut within three years.

 


 

Q9: Why would the Government go ahead with a cut in VAT in the current economic climate?
A9:

To provide a much needed boost to our economy. A VAT cut for the sector would not only provide a boost for the cash strapped public via lower prices but would also support more young people into work and help businesses invest in staff training and premises.

 


 

Q10: How many businesses are supporting the campaign and participating in TAX PARITY DAY?
A10: Over 44 businesses are members of the VAT CLUB JACQUES BOREL. In terms of TAX PARITY DAY we expect over 15,000 outlets to take part right across the country with perhaps more joining them on the day.