A Helping Hand
... for Hospitality
It’s a challenge getting out of bed in the morning when you’re sick. Take the struggling hospitality sector, for instance. It’s been suffering for months now from the long-lasting effects of COVID-19, with symptoms ranging from plummeting demand to enforced closure. While the UK as a whole cautiously begins to emerge from lockdown, the government’s been working on ways to inject a little life back into the country’s restaurants, cafés, hotels and holiday accommodations.
Back on the 8th of July, an announcement was made about a temporary drop in the VAT rate for certain types of business. The reduced rate of 5% applies to many types of hospitality firms, and came into effect as of the 15th of July 2020. Hospitality’s been hit pretty hard by the pandemic, with social distancing measures and mandatory shutdowns taking a big bite out of the sector. Even with restrictions gradually easing, it’s not clear how easily things will, or even can, move back toward “business as usual”.
The VAT drop is a strictly temporary measure, of course. The rate will be bouncing back up to the full 20% after the 12th of January next year. In the meantime, the official list of businesses benefiting from the 5% rate looks like this:
There’s some potential crossover here with the existing VAT exemption rules for certain types of “cultural event”. Those exemptions take precedence here, so they still apply as normal. What the change is going to mean to actual customers isn’t clear yet. Some businesses may be able to pass the saving on, but for many it’s likely that they’ll need to focus on healing up the damage that’s already been done.
Beyond the reduced VAT , the government also announced its oddly named “Eat Out to Help Out” scheme. The gist of it is that, from Mondays to Wednesdays throughout August, customers can get vouchers for participating venues that’ll cut the cost of their food down by as much as half, capped at a £10 discount per person. The businesses will then be able to claim back the difference from the government. They’ll need to register for the scheme first, of course, and both alcohol and service charges are excluded.
The rules for registration are fairly simple. You can qualify if you:
By contrast, you won’t qualify if your business:
It’s looking like an uphill road to recovery for the UK’s hospitality sector, but there are a few government lifelines to grab onto. The key, as always, is to know what you qualify for and understand how to get it.
Stay safe out there, and keep checking back for more Voices from the RIFT.