VAT will be reduced from 20 per cent to five per cent for hospitality businesses on Wednesday, in a bid to boost firms which have struggled during the pandemic and encourage consumers to spend.
Chancellor Rishi Sunak has also announced a scheme to support restaurants which allows diners to claim 50 per cent off meals on Monday to Wednesday up to a maximum saving of £10.
Mr Martin said the tax cut would help to level the playing field between pubs and supermarkets and would help the former reverse the trend of supermarkets “capturing” pub beer sales.
Lavazza coffee and tea at the 764 Wetherspoon pubs will be reduced to £1.29 while breakfast prices will be cut by an average of 41p to £3.49. The cuts will also affect the chain’s meal deals, with a pizza and a soft drink now starting from £5.49 and a burger and drink starting at £4.99.
Mr Martin said: “Not every UK hospitality business will be able to reduce prices immediately.
“Some will need to retain the benefit of lower VAT just to stay in business. Others may need to invest in upgrading their premises.
“However, lower VAT and tax equality will eventually lead to lower prices, more employment, busier high streets and more taxes for the Government.”
Wetherspoon has cut the price of a pint in its pubs to just £1.29 in what it dubbed "Sunak’s specials" after the Chancellor’s VAT cuts.
The pub chain, which has almost 1,000 establishments around the country, announced today price reductions of at least 10p per drink and 20p per meal as it chose to pass on the tax cuts for hospitality businesses.
The firm said that the price of a pint of Ruddles Bitter will be reduced by an average of 50p to just £1.29 at 764 of its pubs, starting on July 15 with all reductions implemented by July 20.
A pint of Doombar will fall to £1.79, an average reduction of 31p, while Abbot Ale and guest beers will be cut to £1.99. Prices at the company’s other 103 pubs, located in city centres, airports and stations, will be around £1 higher, but will still be reduced, Wetherspoons said.
Wetherspoon founder and chairman Tim Martin said: “Wetherspoon will invest all the proceeds of the VAT reduction in lower prices, spread across both bar and food products, with the biggest reductions on real ale.”