Earlier this month, Chancellor Rishi Sunak announced the upcoming Eat Out to Help Out Scheme which is aimed at encouraging people to eat out following lockdown. This allows restaurants, cafes, bars and other establishments taking advantage of the scheme to offer a 50% discount to customers throughout August between Monday to Wednesday each week. The reduction will be valid up to a maximum of £10 per person for food and non-alcoholic drinks. There will be no limit to how many times people can eat out on this scheme.
Who can join the scheme?
As long as you submitted your application to operate as a food business to the relevant local authority on or before 7 July 2020, you will be eligible to use the scheme. However, it is not available to businesses currently operating solely as a takeaway, catering for private functions, hotels offering room service only and mobile food vans. If you sell food for immediate consumption on your premises and have an in-house or shared dining area, you can benefit from this scheme.
Drawbacks of joining the scheme
While the purpose of this scheme is to help food establishments get customers back through their doors, some have voiced reservations about how the scheme will work in practice and whether they can fund the 50% discount while they’re waiting for the reimbursement from the HMRC. Many others feel that they are busy enough without having to worry about additional paperwork and making weekly claims on top of their already hectic schedules.
While it’s worth considering these aspects of the scheme, your business will also need to look at the implications of not joining the scheme during this month and the affect this will have on your footfall.
How to join the scheme
You can find out more about registering to join the Eat Out to Help Out Scheme here. You have until 31st August to register.
Claiming the money back
Every business taking part in the scheme will then be able to claim back the offered discount from the Government. You simply need to keep records of the number of people who have used the scheme in your business premises, the total value of transactions under the scheme and the total of the discounts you have given. This will need to be done for each establishment under the scheme.
You will be unable to claim back for a reimbursement until the 7th August and all claims will need to be completed by the 30th September when the service closes. You will be able to submit your claims on a weekly basis and can expect to receive eligible claims back from the HMRC within five working days of making the claim. You will still be expected to pay VAT on the full amount of your customers’ bills and any money you make using the scheme will be treated as taxable income.
If you have any concerns about the impact of the changes you’re making to your business are having on your insurance, please don’t hesitate to get in touch with Finch Group at enquiries@finchinsurance.co.uk
