#TaxEqualityDay: Sales boost for operators

By Melodie Michel contact

- Last updated on GMT

Sales increased by 10 to 20 per cent for operators who took part in Tax Equality Day
Sales increased by 10 to 20 per cent for operators who took part in Tax Equality Day

Related tags: Cent, Tax

Participants to Wednesday’s (24 September) Tax Equality Day reported sales increases of 10 to 20 per cent for the day, supporting their argument for VAT cut from 20 to 5 per cent.

The campaign, organised by Jacques Borel’s VAT Club, saw a variety of operators cut prices by at least 7.5 per cent​ to show the positive effect of reducing VAT for consumers and the hospitality sector.

Borel said: “The substantial increase in customers on the day due to the price cut of 7.5 per cent (with some members even making a 15 per cent discount,) was beyond our expectations.

“It proves that when you cut prices by 7.5 per cent you then obtain an increase in customers of 10 per cent to 20 per cent which means that the VAT Club JB projection of creating 670,000 jobs thanks to a VAT cut from 20 per cent to 5 per cent is possibly a little conservative. 

“This also proves that the £7.8bn investment of the Treasury in such an endeavour would almost certainly be covered in less than three years by the extra income tax and national insurance generated, along with the substantial decrease in social security claims and a considerable increase of corporate tax.”

Operator feedback

JD Wetherspoon reported sales up 11 per cent on a like-for-like basis on the day, with estimated a 20 per cent rise in volumes on the day. “All of our customers and staff certainly now understand the point that is patently obvious – pubs would be able to compete with supermarkets if there was tax equality,” pointed out chairman Tim Martin.

At Anglian Country Inns, managing director James Nye said the increase in trade more than covered the price reduction. “We gained extra trade from the marketing but also raised new awareness from surprised guests who were delighted to find their food and drink was more affordable,” he added.

Restaurants spread the word as well, with Cambridge restaurant Cambscuisine offering a 15 per cent discount on the day. Founder Oliver Thain said: “Customers were genuinely interested in the disparity and most (75 per cent) were unaware. They certainly enjoyed the 15 per cent discount we gave them on the day and when highlighted that this could be a permanent fixture they got quite animated! It raised an issue that would otherwise go unnoticed and thus worth doing for that reason alone.”

A report​ commissioned by the Cut Tourism VAT campaign last July showed that cutting VAT to 5 per cent would boost GDP by £4bn and create 123,000 extra jobs over 10 years. 

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