Industry operators and trade leaders have lambasted the government for its last minute VAT changes, saying that it will cost the pub sector up to £36m to implement.
Pubs are estimated to end up paying around £570 each to reconfigure their VAT related operations, resulting in a bill for the industry of between £10m and £36m, according to a new survey by the Association of Licensed Multiple Retailers (ALMR).
The changes, which will see VAT cut by 2.5% to £15% following an announcement by the chancellor in his Pre-Budget Report, will come into effect on Monday 1 December.
Nick Bish, chief executive of ALMR, said: “Publicans up and down the country have faced a week of chaos just because it has been decided that the 1 December is a nice neat date to implement the changes.
Alex Salussolia, chairman of Glendola Leisure, said: “This government may be happy to make policy off the cuff, but it’s us who have deal with the fallout.
“The simple fact is that we need to completely revisit the way our operations work - and we have less than a week to do it. We haven’t even had time to work out all the ramifications and all the changes we need to make, let alone fully account for the cost implications.
“It’s not just a matter of ordering new materials; every single one of our business elements needs to be re-programmed.
“There seems to be a complete lack of understanding from Whitehall not only about the practical changes that need to be made, but also the time needed for publicans to understand the cost implications and fit them into the business planning.”
Paul Wigham, chief executive of The Bar Group, said: “The situation is a complete and total mess. This is the worst example of policy on the hoof. We know our industry and we know what makes our customers tick.
“There is no beneficial effect anywhere as far as I can see - not enough is being given back to stimulate demand and now a pile of extra costs have been thrown in. The cost of re-printing menus and re-engineering tills alone will more than offset the reduction in VAT.
“This is a disaster for the industry. You need to watch the market over the next month.”
