Wetherspoon boss attacks ‘unsustainable' taxes as pub firm unveils profits dip
JD Wetherspoon chairman Tim Martin has attacked the "unsustainable" levels of tax on pub businesses, as his company unveiled a dip in pre-tax profits for 2011.
Profit before tax and exceptional items was down 5.9% to £66.8m for the year to 24 July 2011, despite a 7.6% increase in revenue to just over £1b. Operating margin before exceptional items was also down 0.5% to 9.5%.
Like-for-like sales over the year increased by 2.1%, driven by food sales, which rose 4.2%. Bar sales were up by 1.7%, and machine sales fell by 3.9%.
Commenting on the results, Martin said: "The biggest danger to the pub industry is the tax disparity between supermarkets and pubs, creating a serious and unsustainable competitive disadvantage.
"In addition, our pubs pay far higher VAT than those of our nearest neighbours, Ireland and France, as well as having the second highest rates of excise duty on beer and wine in Europe. The well documented increases in areas such as utilities and bar and food supplies, combined with ongoing pressure on consumers' income continue to make this a tough trading environment."
The company also highlighted the tax burden it is under, pointing out that it paid £453.1m in taxes in a year when it made a profit after tax of £46.8m. The taxation figure included VAT of £204.8m, excise duty of £120.2m, PAYE and national insurance of £65.2m, property taxes of £41.7m and corporation tax of £21.2m.
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By Neil Gerrard
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