Wetherspoons boss hits out at pub tax raid as chain warns on profits after costs surge by £45m
Tim Martin, the executive chairman and founder of one of Britain's biggest pub chains, has attacked the Government's tax raid on pubs.JD Wetherspoon warned its profits will be lower in the first half of the year as outrage towards the Government’s business rates raid mounts.His remarks came as other High Street businesses were left fuming after the Chancellor suggested only pubs will receive any help to cope with a surge in business rate bills.Martin said: ‘Pubs pay 25 pence rates per pint versus 2 pence for supermarkets. Also, pubs pay 20pc VAT on food sales versus zero for supermarkets.Shares in the pub chain were down 7 per cent on Wednesday afternoon after it warned interim profits are ‘likely to be lower’ than in the first half of last year.It announced a 4.7 per cent increase in sales, driven by a 9.1 per cent uplift in slot machines and a 6.9 per cent increase in bar sales. Like other pubs, it had a bumper Christmas with revenue up 8.8 per cent in the three weeks to 4 January. However, strong sales at the nation's favourite pub chain won't be enough to meet profit expectations. JD Wetherspoon said its interim profits would be hit by higher business ratesMartin said: 'Costs have been higher than anticipated, with energy, wages, repairs and business rates, for example, increasing by £45 million in the first 25 weeks.'‘If the current sales momentum continues, the company currently anticipates a full year trading outcome slightly below that achieved in FY25,’ Martin added.It comes amid a mounting backlash to Rachel Reeves’ botched business rates reforms, which will result in many firms’ bills increasing.Reeves has now signalled she will offer rate relief to pubs - after a fierce backlash that has seen Labour MPs barred from many establishments.But companies say this must be extended to other firms.Martin has criticised the government’s promises for further support in recent weeks.‘It's inaccurate of the PM to talk of the Government providing “support” for the licensed trade,’ He told the pub industry website The Morning Advertiser:‘It's the reverse of the reality - pubs support the Government.’‘We want fairness, tax equality with supermarkets - the same VAT and the same business rates per pint.'Pubs have been banning Labour MPs from their premises as they say they feel betrayed by the Budget after Labour’s promises to help the High Street.In the Budget, the Chancellor announced a reduction in the so-called ‘multiplier’ used to calculate business rates.But she also confirmed that Covid-era discounts for retail, leisure and hospitality businesses would be phased out.Alongside soaring valuations – in part due to a rebound in trading following the pandemic – it means business rates bills are rising rather than falling.AJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
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Wetherspoons boss hits out at pub tax raid as chain warns on profits after costs surge by £45m
