Restaurants get first taste of eat out to help out scheme
Registration for the ‘eat out to help out’ scheme went live on 13 July, enabling businesses to offer the 50% discount on food and non-alcoholic drinks in August.
Update, 30 July: With the ‘eat out to help out’ scheme launching on 3 August, HMRC confirmed that tax agents are unable to apply on behalf of restaurants and businesses, and has clarified the eligibility of certain food outlets.
Agents can’t apply
In the guidance updated on 27 July, HMRC explained that “at a time when speed is the priority” it would have taken much longer to design a scheme for tax agents. Similar reasons were given for the self-employed income support scheme, which locked agents out of that process due to the time constraints.
Tax agents who attempt to register or claim on behalf of a client will trigger a fraud alert, which will delay the registration and claiming process, and the affected clients would then have to contact HMRC to resolve the issue.
However, HMRC said it’s “worked hard to make the registration and claims process as easy as possible”.
So far more than 53,000 outlets across the UK have signed up to the ‘eat out to help’ scheme. As the scheme readies to launch, HMRC has encouraged outlets keen to participate to register before 3 August so they can benefit for the entire month of the scheme.
The guidance emphasises that the ‘eat out to help out’ vouchers only apply to food and non-alcoholic drinks – alcoholic drinks and even the service charge can’t be included within the discount.
Other updates and eligibility
Restaurants and outlets that have used other government support schemes such as the furlough scheme or the self-employed income support scheme can still register for the eat out to help out scheme.
Since the last guidance there has been further clarification over the term of ‘on premises’ consumption. While the term may seem obvious, the clarification is required for hotels and B&Bs with restaurants where food sold for immediate consumption is eligible, yet food and drink purchased as part of the wider accommodation service is not.
While cafes are eligible for the scheme if they have outdoor seating, takeaways and food vans are not eligible – even if they have tables and chairs on the pavement outside the premises.
Other eligible examples include shopping centres with a designated dining area and stalls at an attraction or stadium, provided there is a designated area.
Another much-debated aspect of the scheme is how the vouchers interact with other discounts restaurants offer diners.
HMRC confirmed that the ‘eat out to help out’ voucher can be used along with other discounts. But when the restaurant goes to make a claim they must first apply any special offers, vouchers or discount schemes.
Meanwhile, the 50% discount is not flexible. Restaurants wanting to participate can’t change the terms of the scheme and flex the discount. HMRC emphasises that the discount must be 50%.
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23 July: One of the Chancellor’s flagship Summer Statement announcements was the ‘eat out to help out’ scheme. The scheme was designed to encourage nervous diners back into restaurants, as one of the many measures to support the beleaguered hospitality sector bounce back from the Covid-19 lockdown measures.
Restaurants are now able to sign up to the scheme and offer diners a 50% discount all day every Monday, Tuesday and Wednesday from 3 to 31 August. As the Sunak announced in Parliament, the discount is up to a maximum of £10 per diner, which the restaurant can then claim back from the government.
As the purpose of the scheme is to get patrons back through the door, the scheme does not limit customers on the number of times they can use the meal vouchers throughout August. It should go without saying, but the guidance specifies that customers not eating or drinking cannot get a discount.
Restaurants will have until 31 August to register for the scheme, provided their business sells food for immediate consumption on the premises, is registered as a food business with their local authority and has its own dining area. This means though that takeaways, private catering services, room service in hotels and mobile food vans will not be eligible for the scheme.
Restaurants will have to register using their government gateway ID and provide the name and address of each establishment. That’s unless they are registering more than 25 restaurants as part of the same business, where they only would have to provide a link to a website which lists the trading name and address of the participating restaurants.
The guidance also suggests restaurants come armed with their bank account number, sort code and the date when their business started trading when registering. In addition, the businesses may also need their VAT registration number, PAYE reference number and unique taxpayer reference.
Reaction to the scheme
The Chancellor’s attempt to stimulate the hospitality sector picked up some flak from HMRC’s chief Jim Harra and advisers questioning the effectiveness and value for money of the scheme.
Ben Steele, managing partner of Steele Financial, told AccountingWEB that many of his hospitality clients see Monday to Wednesday as the “quietest days” and “usually do not bother to open because of this”.
On Tuesday’s Any Answers Live, panellist and practice owner Della Hudson echoed Steele’s concerns: “The eating out to support restaurants is only for the first part of the week and it might be that a restaurant is only viable opening over the weekends and a few other nights.”
To add to this, many potential diners may put their health before the 50% vouchers: “A lot of it depends on the public’s confidence in getting out and about in a post-lockdown world. One of the things I really want to do is go out into a decent restaurant. However, if I don’t feel safe there, I’m not sure I want to do it. I’d stay home and cook instead.
"A lot of restaurants have been doing take away, so are they going to switch off their takeaway and move to a dine-in experience? How many people can they serve through the takeaway and how profitable is the dine-in experience?”
Regardless, Hudson recommends for restaurants to register for the vouchers because “it is better to register and not use it”.