VAT slashed and diners to receive discounts for eating out at pubs and restaurants

8 July 2020, 13:53

By Megan White

VAT will be slashed and diners will receive a discounts for eating out at pubs and restaurants as part of a new package of measures to protect the economy from the coronavirus recession.

Chancellor Rishi Sunak slashed VAT on food, accommodation and attractions from 20 per cent to 5 per cent, a tax cut worth up to £4 billion, as part of the radical new plans announced on Wednesday.

He also revealed an "eat out to help out" plan for dining out in August to boost the hospitality sector, with a 50 per cent discount per head from Monday to Wednesday up to a maximum discount of £10 per diner.

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The Chancellor said he wants to see pubs, restaurants, cafes and B&Bs "bustling again", telling MPs: "At the moment, VAT on hospitality and tourism is charged at 20 per cent.

"So I've decided, for the next six months, to cut VAT on food, accommodation and attractions."

File photo: Di Maggio's outdoor restaurant area in Glasgow
File photo: Di Maggio's outdoor restaurant area in Glasgow. Picture: PA

Mr Sunak said VAT will be reduced from July 15 until January 12 to help, noting: "This is a £4 billion catalyst for the hospitality and tourism sectors, benefiting over 150,000 businesses, and consumers everywhere - all helping to protect 2.4 million jobs."

Discussing the food vouchers, he told the Commons: "I can announce today that, for the month of August, we will give everyone in the country an 'Eat Out to Help Out' discount.

"Meals eaten at any participating business, Monday to Wednesday, will be 50% off, up to a maximum discount of £10 per head for everyone, including children. Businesses will need to register, and can do so through a simple website, open next Monday.

"Each week in August, businesses can then claim the money back, with the funds in their bank account within five working days."

The 50 per cent "eat out to help out" discount can be used "unlimited times" on eligible days when dining in but will only include non-alcoholic drinks, the Treasury's Plan For Jobs document says.

But the temporary VAT cut does not include alcohol, the document added.

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Unveiling announcements in a "plan for jobs" which could cost up to £30 billion, Mr Sunak also:

- Revealed firms which have furloughed staff will be given a £1,000 bonus to keep workers in jobs.

- Confirmed plans to abolish stamp duty on properties up to £500,000 in England and Northern Ireland.

- A £2 billion scheme of taxpayer-funded work placements for 16-to-24-year-olds on Universal Credit and at risk of long-term unemployment.

- A £3 billion green package, with grants for homeowners and public buildings to improve energy efficiency.

- A £111 million programme of unpaid traineeships combining work experience with training.

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