From Wednesday 15 July 2020 to 12 January 2021, to support businesses and jobs in the hospitality sector, the reduced 5% rate of VAT will apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises across the UK.
Further guidance on the scope of this relief will be published by HMRC, but due to the short notice of this change businesses should start planning straight away for the changes. With regard to prices, we would encourage businesses to maintain prices and increase their own profits rather than passing the saving on to customers in order to get the most benefit out of the government’s offer.
‘Eat out to help out’ in August
In order to support around 130,000 businesses and to help protect the jobs of their 1.8 million employees in the hospitality sector the government will introduce the “Eat Out to Help Out” scheme to encourage people to return to eating out.
This radical scheme will entitle every diner to a 50% discount of up to £10 per head on their meal, at any participating restaurant, café, pub or other eligible food service establishment from 3 to 31 August.
The discount can be used an unlimited number of times and will be valid Monday to Wednesday on any eat-in meal (including non-alcoholic drinks) for the entire month of August 2020 across the UK.