Member Article

Leading Leeds bar group joins campaign for VAT reduction

An independent Leeds based bar group is joining the campaign for a lower VAT rate for the hospitality sector, with the aim of creating jobs and stimulating growth in the increasingly important service sector.

The North Bar Group, which runs five establishments across Leeds, will be joining the Tax Parity Day on the 25th September, a campaign day designed to highlight that the UK’s hospitality businesses are paying 20% VAT on all sales, whereas the supermarkets pay virtually no VAT on food. For that day all products at participating venues will be lowered in price by 7.5% to highlight the saving that will likely be passed on to customers if the campaign works.

The Association of Licensed Multiple Retailers (ALMR) job tracker research shows that licensed hospitality created one in eight of all new jobs in 2011, and one in six of jobs for 18 to 24 year olds.

More than 20 countries in the EU have a lower VAT rate for the hotel sector and 13 do so for the overall hospitality sector. In France, tax was reduced from 19.65% to 5% and led to the creation of almost 22,000 jobs in the first year.

It’s estimated that a cut in VAT could help create 320,000 jobs in a recovering economy and help bolster the sector, which is a major employer of women and 18 to 24 year olds - two of the groups hardest hit during the recession.

Opened in 1997, North Bar has become a leading name within the UK beer scene and is renowned for introducing a number of global beers to the UK market. Last month, the group launched its newest venture, Preston, in Oakwood on the outskirts of Leeds city centre.

John Gyngell, director of North Bar, said: “We’re convinced that drinking in a controlled, regulated environment is a much healthier scenario than drinking at home or ‘pre-loading’ before venturing out on the town but it’s very difficult to compete with incredibly cheap supermarkets who are able to sell alcohol as a loss leader due to their massive tax breaks in other areas.”

Christian Townsley, director of North Bar, added: “What with punitive taxes on beer especially and all sorts of negative campaigning against pubs and bars it’s been a wonder that we’ve managed to grow our business during the recession. Joining this campaign highlights just how much of a difficult tax environment we have to work in.“

This was posted in Bdaily's Members' News section by Anna Addison .