ALMR urges chancellor to delay VAT rises and freeze beer tax

The chancellor has been urged to delay this year’s planned VAT increase by at least a month and scrap plans to raise beer tax to avoid hitting licensees with a double whammy of tax increases early next year.

In its submission ahead of this Wednesday’s Budget, the Association of Licensed Multiple Retailers (ALMR) said Alistair Darling needs to “clear up the mess” left in the wake of last year’s “over-hasty” 2.5 percentage cut in the VAT rate.

The Government is planning to revert to 17.5% rate on 31 December, which, allied with proposals to raise beer tax by 2% above inflation for the next few years, will create a double whammy for pubs and bars, the ALMR warned.
 
ALMR chief executive Nick Bish said: “New Year’s Eve is the worst possible day to impose the huge task of reversing last year’s VAT cut.

“It cost the sector almost half a million pounds to implement the cut to 15% and, because of the timing, will cost a similar amount to reintroduce the 17.5% rate. That’s the worst possible hangover for hardworking licensees to face at the start of a new year.”

The ALMR is also calling for a moratorium on new business taxes, cost burdens and red tape to give pubs “vital breathing space”.

“Unlike other industries we are not looking for a government bailout – hard working licensees want a hand-up not a handout,” Bish said.

“With a little bit of support from the government they can not only survive but even thrive. Even good, well invested sites are having to generate positive growth of between 3-4% just to stand still. The Government should be helping them do that, not hindering them with further tax increases.

Budget countdown: Public against beer tax rises >>

Pub closures have cost the Treasury £242m a year in lost taxes >>

Beer tax hikes could put 60,000 jobs at risk >>

Hospitality needs ‘radical’ approach to VAT to ride out recession >>

VAT change could cost pub sector £36m to revamp menus and tills >>

By Daniel Thomas

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