JD Wetherspoon chairman Tim Martin called for a level playing field for pubs yesterday after revealing his firm paid £600 million in tax over the last year.
The firm yesterday posted a 3.1% increase in underlying pre-tax profits to £79.4m in the year to July 27 as revenues climbed 10% to £1.4 billion.
However, Mr Martin’s attention was firmly focused on the issue of VAT on food sales rather than the company’s overall financial performance.
The group is backing Tax Equality Day on September 24 when it will voluntarily fund a 15% cut in VAT on its meals in order to highlight the disadvantage it claims it is at in its fight for business with the major UK retailers.
“The biggest danger to the pub industry is the VAT disparity between supermarkets and pubs,” Mr Martin said yesterday.
“Wetherspoon, along with many pub and restaurant companies, is supporting Jacques Borel’s VAT Club on Tax Equality Day to publicise this inequality.
“A similar danger relates to the general tone of corporate governance advice and practice which has helped to create unstable board rooms, often preoccupied by the wrong considerations.
“For example, many do not even recognise the danger from the VAT disparity, despite the high weekly level of pub closures which has lasted for many years.”
Despite the VAT issue, Mr Martin said the firm made significant strides forward in the year to June, and almost £30m had been paid to staff in the form of incentives.
“I am pleased to report another year of progress, with record sales, profit and earnings per share,” Mr Martin said.
“The company generated £600.2m in taxes, an increase of £48.7m, compared with the previous year, equivalent to £662,000 per pub.
“We now employ over 34,000 people, an increase of over 3,000 in the last year,” he said.
“In addition, £29.2m in bonuses and free shares was paid to employees, 82% to those working in our pubs.”
The company has 927 outlets across the UK and a significant presence in the north east of Scotland with recent developments including the £2.3m reopening of Jolly’s Hotel in Broughty Ferry.
The firm is also pursuing plans for a new superpub in former Angus Council offices in Forfar.
The company said current trading was encouraging, with like-for-like sales increasing by 6.3% and total sales up 11.4% in the six weeks to September 7.
Mr Martin said the firm was “aiming for a reasonable outcome” to the current financial year.