Sunak announces 50% ‘Eat Out to Help Out’ discount scheme & cuts VAT on food, accommodation and attractions

Chancellor Rishi Sunak has slashed VAT on hospitality and tourism from 20 per cent to 5 per cent for six months.

He has also announced the government will give everyone 50% off meals in participating restaurants during August.

The Chancellor said the cut in VAT will help protect jobs in the tourism and hospitality which has been severely impacted by the pandemic.

Around 80 per cent of hospitality firms stopped trading in April and 1.4 million hospitality workers have been furloughed – the highest proportions of any sector.

The rate of VAT applied on most tourism and hospitality-related activities will also be cut from 20 to 5 per cent.

The UK government said the cut will save households around £160 per year on average.

In his statement to Parliament, Rishi Sunak said: “I’m announcing two new measures to get these sectors moving and protect jobs.

So first, at the moment, VAT on Hospitality and Tourism is charged at 20%, so I’ve decided for the next six months to cut VAT on food, accommodation and attractions.

Eat in or hot takeaway food from restaurants, cafes and pubs. Accommodation in hotels, B&B’s, campsites and caravan sites and attractions like cinemas, theme parks and zoos.

All these and more will see VAT reduced from next Wednesday, until January the 12th.”

Ensuring there is enough demand as hospitality businesses reopen will be key to helping them businesses recover

The Chancellor has said to “encourage people to safely return to eating out at restaurants the Government’s new Eat Out to Help Out discount scheme will provide a 50 per cent reduction for sit-down meals in cafes, restaurants and pubs across the UK from Monday to Wednesday every week throughout August 2020.”

Mr Sunak said the 50 per cent off scheme “has never been tried in the UK before, this moment is unique, we need to be creative.

“So, to get customers back into restaurants, cafes and pubs and protect the 1.8 million people who work in them, I can announce today that for the month of August, we will give everyone in the country and eat out to help out discount.

Meals eaten at any participating business Monday to Wednesday will be 50% off, up to a maximum discount of £10 per head for everyone including children.

Businesses will need to register and can do so through a simple website open next Monday.

Each week in August businesses can then claim the money back with the funds in their bank account within five working days.”

Welsh Conservative MS Darren Millar, the Shadow Minister for Covid Recovery – said:

“The six-month cut in VAT from 20 percent to five percent for eligible hospitality and tourism businesses will be a shot in the arm for an industry which has been hit hard by the coronavirus pandemic.

 The announcement of further assistance from the Chancellor with the #EatOutToHelpOut discount of 50 percent off meals throughout August will also be music to the ears of the sector.

 The UK Government is doing everything it can to aid the economic recovery and help businesses to bounce back from the pandemic, we now need some urgency from the Welsh Labour-led Government to do what it can to re-open Wales and help businesses here to adapt so that we can protect as many livelihoods as possible while keeping staff and customers safe.”