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The government has reduced the VAT flat rate for businesses in the catering, hospitality and holiday accommodation sectors that have been most affected by the coronavirus.

The reduced rates will apply from 15 July 2020 to 12 January 2021 and are as follows:

  • Catering services including restaurants and takeaways rate changed from 12.5% to 4.5%
  • Hotel or holiday accommodation from 10% to 0%
  • Pubs from 6.5% to 1%

You can see more details about the reduced VAT flat rate on the government’s website.

Eat out to help out scheme

From 3 August 2020, businesses can use the Eat Out to Help Out Scheme to offer a discount to diners. Businesses must register on HMRC’s website to be eligible and registration closes on 31 August 2020.

The Eat Out to Help Out Scheme can be used:

  • all day, every Monday, Tuesday and Wednesday from 3 to 31 August 2020;
  • to offer a 50% discount, up to a maximum of £10 per person, to diners for food or non-alcoholic drinks to eat or drink in;
  • to claim the money back from the Government.

There is no limit to the number of times customers can use the offer during the period of the scheme.

For help and advice with the government’s coronavirus support packages, contact Ann Bibby on abibby@ellacotts.co.uk or 01295 250401.