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NEWS FLASH: VAT cut for hospitality businesses and 50% meal discount for everyone to stimulate restaurant spend

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The Chancellor is to cut VAT to 5% for hospitality businesses and introduce a new discount initiative for eating out to encourage customers to spend again.

Rishi Sunak is fast-becoming the hospitality industry’s hero of the coronavirus pandemic, as he today announced the changes to parliament in what he described as a £4bn catalyst that would protect over 2.4 million jobs.

From next Wednesday until January 12, VAT for hospitality businesses, including food, accommodation and attractions will be reduced from 20% to 5% for the next six months.

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He will also give everyone in the country an ‘eat out to help out’ discount to help kick start the sector and get it moving again following the Covid-19 lockdown.

The first-of-its-kind scheme will see everyone given 50% off meals, up to £10 per head for adults and children, in participating restaurants from Monday to Wednesday during August.

Businesses will need to register through a website which opens next Monday and apply in the month of August, the chancellor said in his statement.

During his address, Sunak also said the government will pay a £1,000 bonus to businesses for each furloughed person brought back and employed to January 2021.

The ‘job retention bonus’ could cost as much as £9bn if every furloughed worker is covered, he said in his statement.

To qualify, when the furlough scheme officially ends in October, employees must be paid at least £520 each month from November to the end of January, the equivalent of the lower earnings limit in National Insurance.

Sunak also announced a £2bn ‘kickstart scheme’ to help create more jobs for people aged 16-24 and a pledge to provide 30,000 new apprenticeships for young people in England, giving firms £1,000 for each new work experience placement they offer.

Tags : GovernmenthospitalityhotelsRishi SunakVAT
Zoe Monk

The author Zoe Monk

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