In A Nutshell…
COVID 19 VAT Changes: from next Wednesday, VAT will be cut from 20% to 5% on food and drinks, accommodation, and admission to attractions until the 12th of January 2021.
I briefly got excited about my food bills (the younger me would be disappointed). Unfortunately, you can’t stock up on cheaper food and drink in the supermarket. This cut only applies to hot or cold takeaways or eat-in food and drink from restaurants or cafes etc. It does not cover alcoholic drink.
Great news for customers who can also take advantage of the Governments early-bird Eat Out to Help Out scheme. This will give them up to £10 off their bill in August if they’re dining in Monday – Wednesday. If you’re in the catering business and you want to offer this to your diners and be reimbursed by the government, then you must register your business to do so!
From A Personal Perspective
As a family of five, I think that the combination of these two offers will entice us out of the house to eat. I can think of a couple of places that I hope will register for the Eat Out to Help Out scheme. Make sure you tell your customers (and possibly me!) when you register for the scheme, because I’m definitely fed up of meal planning and cooking non-stop…
Both schemes will be a welcome boost to the hospitality sector. I can see that the administrative side of accounting for two different VAT rates and receiving reimbursements from the government won’t be quite as much fun though for the restaurant owner or their bookkeeper. Of course, the details of all of this have yet to be hammered out. For example, if you have booked and paid for holiday accommodation and paid 20% VAT, are you owed a VAT refund? Is the VAT rate applicable to the accommodation dates or the date of the sale? What exactly is the definition of an attraction? Is an event an attraction? Hopefully, further guidance on COVID 19 VAT changes and business eligibility will arrive soon