THE boss of JD Wetherspoon has declared the survival of the pub industry depends on the UK Government ending the tax disparity between supermarkets and the licensed trade.

Tim Martin, a vocal and long-standing campaigner for VAT to be cut for the hospitality industry, said the business rates rebate handed to pubs in England and Wales in this week’s Budget is“dwarfed by regulatory and regulatory increases”.

The arch-Brexiter was commenting as Wetherspoon unveiled a 42.8 per cent rise in underlying profits to £51.4 million in the 26 weeks ended January 22, with revenue up 1.4 per cent to £801.4m. Investors reacted coolly, sending shares in the pub giant down more than three per cent.

Mr Martin, whose firm has more than 70 outlets in Scotland and is looking for more sites, said the “disparity” between pubs and supermarkets over how much they pay in VAT and business rates is the “biggest danger to the pub industry”.

While many foods sold in supermarkets, such as fruit, vegetables and meat, are zero-rated on VAT, food sold in pubs has a 20 per cent VAT rate.

He said: “We understand the need for the Government to raise taxes. However, there should be a sensible rebalancing of the taxes paid by pubs and supermarkets, if the pub industry is to survive in the long term.

“Wednesday’s Budget was presented by the Chancellor as providing tax relief of approximately £1,000 per pub, for pubs with a rateable value of less than £100,000. In fact, that sum is dwarfed by tax and regulatory increases.”

Shares in Wetherspoon closed down 29.5p at 935.5p.