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Chancellor Boosts Hospitality Sector with VAT Cut and Discount Scheme

Chancellor Rishi Sunak will cut VAT from 20% to 5% for parts of the hospitality sector and introduce an ‘Eat Out to Help Out’ month long discount scheme for diners.

In a bid to secure jobs in the hospitality industry, the rate of VAT applied to food (eat in and takeaway) served in restaurants, cafes, pubs, hotels and at attractions will be cut to 5% from Wednesday 15 July for a six month period until January 12, 2021. The cut does not apply to alcohol.

The Chancellor also unveiled the “eat out to help out” discount scheme as part of a series of measures to restart the economy amid the coronavirus pandemic. The deal means people can get up to £10 off per head if they eat out from Monday to Wednesday.

Businesses that want to take part in the scheme will have to register through a website that opens on Monday 13 July.

As part of the plan to support jobs, the Chancellor also announced a Job Retention Bonus which will be introduced to help firms keep furloughed workers. UK Employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021.

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