Harrogate business’s plea to Chancellor over VAT in run-up to Autumn Statement

Simon Midgley, owner of Harrogate's Starling Independent Bar Cafe Kitchen, as work progresses on it £250k expansion. (Picture Gerard Binks)

Simon Midgley, Harrogate born-and-bred owner of Starling Independent Bar Cafe Kitchen, said he agreed with the boss of Wetherspoon that the Government should tackle what the industry regards as the 'unfair' competition the hospitality sector is facing from the retail sector during the worst cost of living crisis for decades.

"Wetherspoons’ Tim Martin has been sensibly banging the drum for long-term VAT parity with supermarkets rather than simply looking for short term support by way of a grant or something similar," said Mr Midgeley whose Oxford Street-based business is about to reopen after a £250,000 expansion.

"Supermarkets pay no VAT on all the food they sell while pubs and restaurants are taxed at 20% on their sales.

"Due to surplus profits this creates, supermarkets are then able to choose to sell alcohol at in some cases below cost i.e. as a lost leader."

As new figures show Britain is now in recession, confidence in the business world is also slipping.

Expectations are that Chancellor Jeremy Hunt will announce the return of austerity and a new squeeze on public spending in the Government's delayed fiscal statement next Thursday, November 17.

But, as well as concern over business costs when the Government’s energy price cap for businesses ends next April, Mr Midgeley says the hospitality sector is simply looking for a level playing field on which to compete.

"As a business owner we need more certainty on the short term future for the energy market and what will be in place from April 2023 when the current business cap ends," he said.

"But the disparity of retail prices between pubs and supermarkets becomes even more important to consumers when times are hard such as in the current cost of living crisis."

The forthcoming re-opening of Starling after its £250k redevelopment will see a tripling of the internal ground floor space and a doubling of the frontage on the street.

There will be more comfortable seating for customers and a new state-of-the-art kitchen.