Owners of pubs and restaurants across Oxfordshire are celebrating today following the government’s announcement that diners will get a 50% discount off their restaurant bill during August under plans to support the hospitality sector and get people eating out once again.
VAT on hospitality and tourism will also drop to 5% for the next six months.
Kay Chandler of The White Hart in Fyfield, whose gastro pub has just reopened and is already very busy, said : “This is really exciting news about the VAT. I think it will mean the difference between survival and bankruptcy to many.
Chancellor Rishi Sunak unveiled the “eat out to help out” discount yesterday 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 between Monday and Wednesday. VAT on hospitality and tourism will also drop to 5% for the next six months.
The discount will not apply to alcohol, but to food and soft drinks up to £10 per person, and can be used unlimited times during August and applies to participating restaurants, cafés, and pubs across the UK.
Businesses that want to take part in the scheme will have to register through a website that opens on Monday 13 July. Each week in August, businesses can then claim the money back, with the funds in their bank account within five working days.
The cut in VAT will apply to eat-in or hot takeaway food from restaurants, cafes and pubs. The lower tax rate will be implemented next Wednesday and will remain in place until 12 January 2021.
Kay Chandler of The White Hart in Fyfield adds: “What this opening week has shown us, is that even running at only 70% of our previous capacity (which is our new full capacity) we need more staff to operate in terms of the extra cleaning between guests, the new procedures and simply to man the hugely extended service area we now have to ensure social distancing we have people in every room and area we have.
“This is fanastic news from the Government. It’s certainly going to make a huge difference to the survival of many businesses”
“More staff to pay out and less money in does not make a recipe for success, so the reduction in VAT will really help,” she says.
“The meal discounts are a great idea too – after the initial July rush of people desperate to dine out, it is a great idea to boost early week August reservations. Who doesn’t want 50% off a top meal out?
Others were more reserved: “Mark Butcher from The White Hart in Wytham said: “It’s all about the detail! It only relates to food and non-alcohol drinks, which is great for us as we are 70% food sales. But not good for traditional pub boozers. #eatoutohelpout is also very welcome.”
Chris Mulhall from The Plough at 38 in central Oxford explains why the news is such a big deal: “The 75% overall reduction in sales tax is a big deal for our business and industry, we buy the majority of our food without any applied VAT and must sell it on with 20% included, this tax collection service is somewhat imbalanced, so to be able to reduce our quarterly VAT bill by such a margin is a progressive move and very welcome.
“In an ideal world this could passed on to the customer as an incentive, with reduced prices on the menu, however the extent of this given the lack of sales in the last few months may be difficult but we will try, there is a positive in that any VAT saving can be invested back in to the business which is a sustainable measure.”
Clinton Pugh, MD of Cafe Coco, Kazbar and Cafe Tarifa on Cowley Road says: “This is fantastic news from the Government. It’s certainly going to make a huge difference to the survival of many businesses. Great move!”
Sarah Edwards and Katherine MacAlister