J D Wetherspoon is to cut the VAT that customers pay on food and drinks for one day this month with company boss Tim Martin saying a broader cut is needed for pubs to “thrive, invest and create new jobs”.

As part of the company’s ‘Tax Equality Day’ on 17th September, the chain will place the spotlight on the tax pubs pay compared to supermarkets.

All food and drinks in pubs are subject to 20 per cent VAT. In comparison, supermarkets pay zero VAT on food and are able to use that saving to sell alcohol to customers at a discounted price.

On 17th September, a customer spending £10 on food and drinks will pay only £9.25 on Tax Equality Day.

According to the business, prices at the pubs will be reduced for one day only to mark Tax Equality Day (in Scotland, in line with Scottish licensing laws, prices will be reduced on food and non-alcoholic drinks only).

Wetherspoon’s founder and chairman, Tim Martin, said: “The biggest threat to the hospitality industry is the vast disparity in tax treatment among pubs, restaurants and supermarkets. Supermarkets pay zero VAT in respect of food sales, whereas pubs, bars and restaurants pay 20 per cent.

“This tax benefit allows supermarkets to subsidise the selling price of beer. Pubs have been under fantastic pressure for decades, because of the tax disadvantages which they have with supermarkets.

“It doesn’t make sense for the hospitality industry to subsidise supermarkets. A VAT cut to 12.5 per cent is needed to ensure that pubs, bars and restaurants do not continue to close, but instead thrive, invest and create new jobs.

“Customers coming to Wetherspoon’s pubs on Thursday 17 September will find the price of their food and drinks to be lower than normal. We call on the chancellor to create tax equality between the hospitality industry and supermarkets.”