On 8 July 2020, the government announced that it would introduce a temporary 5% reduced rate of VAT for certain supplies of hospitality, hotel and holiday accommodation, and admissions to certain attractions. This cut in the VAT rate from the standard rate of 20% will take effect from 15 July 2020 to 12 January 2021.

On 4 August 2020 the government announced a new scheme for the hospitality industry called ‘Eat Out to Help Out’.

The scheme will run from 3 August to 31 August and will incentivise customers to eat in your restaurant or other eating establishments by giving them a discount which you can then claim back from the government.

The Eat Out to Help Out discount can be applied to food and/or non-alcoholic drinks purchased for immediate consumption on premises, up to a maximum discount of £10 per diner (inclusive of VAT). This includes soft drinks and/or packaged snacks if they are for immediate consumption on the premises. There is no minimum spend requirement.

It should be noted that VAT will always be due on the whole amount of the customer bill before the scheme discount is applied.

Make sure you are dealing with these transactions correctly in your accounts.

If you have any queries then please get in touch.