From today registration is open for the Eat Out to Help Out Scheme.

Businesses where food is sold for immediate consumption on the premises are eligible to register for the scheme.  Including restaurants cafes, pubs and similar establishments including those within tourist or holiday attractions.

Sales eligibility

The scheme applies to purchases of food and non alcoholic drinks (purchased for dining in) for immediate consumption on the premises  all day Monday, Tuesday and Wednesday from 3-31 August.  You can apply a 50% discount up to a maximum of £10 per diner, inclusive of VAT.   There is no minimum spend requirement.   Service charges are NOT included in the scheme.

Ineligible items

• Alcoholic beverages
• Tobacco products
• items for consumption off premises

HMRC will have a dedicated helpline for businesses and web chat available from today.

On registration you will be

• able to download promotional materials
• added to a public list of registered establishments

To register you will need

• Government gateway ID and password (you can create this on  registration if you don’t have one)
• the name and address of each establishment to be registered
• the UK bank account number and sort code for the
• the address on your bank account for the business (this is the address on your bank statements)

You may also need your

• VAT registration number (if applicable)
• employer PAYE scheme reference number (if applicable)
• Corporation Tax or Self Assessment unique taxpayer reference

Agents cannot apply for the scheme on your behalf.

Records to Keep

For each day you are using the scheme, you must keep records of the

• total number of people who have used the scheme in your establishment
• total value of transactions under the scheme
• total amount of discounts given

You can claim reimbursement from 7 August 2020, you must wait 7 days from registration to make a claim.  Payments will be made within 5 working days.

How to work out a claim

To work out your claim first apply any special offers or in house discounts, deduct service charges, and alcoholic beverages then apply a 50% discount to the food an non alcoholic beverages, up to a maximum of £10 per head.

For example  

Group of 4 people

£70 spend including £15 on alcoholic beverages and £1 service charge

Total bill £70

Less alcoholic beverages £15

Less service charge £1

Amount discount can be applied to £54

50 % discount on £27 (£6.75 per diner so below £10 cap)

Bill after discount to customer £43

Points to note

• You still pay VAT based on the total customer bill before the scheme discount
• Money received under the scheme will be treated as taxable income
• Immediate consumption –Food sold as part of a wider accommodation package such as bed and breakfast are not included
• Event and weddings are not covered by the scheme or where food and drink is sold as part of wider catering service
• Informal seating in areas that do not belong to the establishment will not qualify such as seats on a pavement outside a takeaway van

Further guidance is available on HMRC website: HMRC Guidance Eat Out to Help Out

Should you have any questions or require any assistance with your record keeping please do get in touch! You can call us on 01243 782 423 or head to our contact page.

The Chancellor has announced a cut in the rate of VAT from 20% to 5% for the hospitality sector including –

• Restaurants
• Pubs
• Bars
• Cafes
• Hot takeaway food

The reduced rate applies to food, accommodation and non-alcoholic beverages starting from Wednesday 15 July 2020 until 12 January 2021.  

This change is  a much needed break for the sector but could prove challenging for some given the short timescale to introduction.

Some things to consider: –

• The need to distinguish for the first time the different VAT rates applying to alcoholic and non-alcoholic drinks.
• Software and till updates necessary to facilitate the change.  Good news is that we already have a 5% reduced rate for VAT in place so most systems will have this rate built in. Best to contact providers as soon as possible to understand what changes are needed.
• Deposits, it may be possible to charge the lower rate of VAT on deposits if the sale is taking place after the change.
• If you intend to reduce prices consider the impact on cash flow and existing VAT liabilities.
• The interaction between the reduced rate of VAT and the Eat Out to Help Out voucher scheme is not yet clear and will need to be considered.

If you have a business in the hospitality sector, and need any assistance with the changes please contact us. You can call us on 01243 782 423 or head to our contact page.