The government has announced that the Coronavirus pandemic has severely impacted the hospitality and tourism sectors. Therefore, a range of measures was announced by Rishi Sunak on 8 July 2020 which relate to protecting jobs in the sector and also help economic recovery by encouraging people to go out to eat and visit attractions.
Reduction in the VAT rate
Temporarily, the rate of VAT for hospitality, attractions and accommodation will be reduced to 5%. It's important to note that this reduced rate only applies to the following:
- hospitality: hot and cold food and hot and cold non-alcoholic beverages sold for on-premises consumption – for example, in restaurants, cafés and pubs - and hot takeaway food and hot non-alcoholic beverages sold for consumption off the premises. It does not include alcoholic beverages of any kind
- accommodation: sleeping accommodation provided in a hotel or similar establishment, holiday home accommodation, pitch fees for caravans and tents and supplies of associated facilities
- attractions: admission to shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions and similar cultural events and facilities provided that these are not included within the existing cultural exemption
This is for restaurants, pubs, bars and cafes. Once the reduced VAT is applied, it is up to the business owners if they want to pass the saving down to their customers. There will be more detailed information to follow about how the VAT is to be reported in the VAT returns for the next couple of quarters.
Eat Out to Help Out Scheme
During the lockdown, people were only able to access takeaway services. Now the government want to encourage people to go to restaurants, pubs, bars and cafes to eat out. The ‘Eat Out to Help Out Scheme’ will entitle people to claim a 50% discount up to the value of £10 per head for their meal if they eat out during August 2020.
However, it is essential to note the following regarding this discount:
- It is only available at restaurants, pubs etc. that have signed up to the scheme.
- The discount is only available if you eat out Monday – Wednesday.
- The discount only applies to food and non-alcoholic drinks purchased.
The government will then reimburse the participating restaurants within a week.
If you are in the hospitality or tourism sector and you would like more information and advice about these schemes, please contact us directly.
You can call 01623 490 120 or email