The Chancellor of the Exchequer, Rishi Sunak, recently outlined further incentives to stimulate the UK economy. If you are a business owner, particularly in the hospitality and tourism sector this stimulus package could mean you need to act now in order to benefit from the package and comply with changes to regulations, this is particularly important for VAT registered businesses. We have put together this guide outlining some of the key announcements made by the Government on 8 July 2020, at the end of the document you will find links to further guidance on this topic.
The £30bn package includes:
Specific Support for Hospitality & Tourism
VAT Reduction on Food, Accommodation & Attractions
As mentioned above, if you own a business in the hospitality or tourism sector, you may benefit from the Chancellor's recent announcement however you may also have additional compliance requirements you need to address. The rest of this document focuses on specific support available and changes applicable for businesses in the hospitality and tourism sectors.
From Wednesday 15 July cafes, pubs, restaurants, theme parks, and accommodation providers will benefit from reduced sales tax charged on eat-in and takeaway hot food, non-alcoholic beverages, and attractions such as cinemas, theme parks and zoos. Hospitality and tourism business owners will can reduce VAT from 20% to 5%. The reduction is intended to encourage consumers to spend money in the hospitality and tourism sectors. The reduction will operate from 15 July 2020 – 12 January 2021, this means that businesses will need to change VAT rates mid-week on two occasions.
If you are a business owner registered for VAT in the hospitality or tourism sector you should consider the following to make sure your business is ready:
‘Eat Out to Help Out’
Hospitality businesses can register for the ‘eat out to help out’ scheme as of Monday 13 July. The scheme will operate for the month of August and will provide consumers a discount of 50% per head up to a maximum of £10 on meals Monday–Wednesday. Businesses part of the scheme will be able to claim back the discount offered to individuals from the government each week and the funds will be in business bank accounts within 5 days.
Sign up to the scheme online from Monday.
Find out more about the Government’s plans for jobs here