Carol Hallam – VAT Specialist
The Eat Out to Help Out Scheme has been introduced as part of the government COVID package to help rebuild businesses and may be used together with other schemes, such as the Job Retention Scheme.
The scheme aims to help registered establishments for the period from 3 August to 31 August 2020, by offering discounts on food and non-alcoholic drinks, to entice diners back into the eateries following the lockdown period.
It is necessary to register to join the scheme if an eligible establishment intends to operate the scheme and before any discounts are offered to the customers.
The scheme is available for registered establishments which:
- Sell food and non-alcoholic drink for immediate consumption on the premises. This can be its own premises, shared premises, designated dining area or formal outdoor seating area.
- Food and non-alcoholic drink purchased with the intention of dining in but subsequently taken away would still qualify for the discount.
- Was registered as a food business with their relevant local authority on or before 7 July 2020.
Examples of when the scheme is not available:
- Pubs where food is served
- Hotel restaurants for meals consumed in the restaurant premises
- Restaurants and cafes within tourist attractions, holiday sites and leisure facilities
- Dining rooms within a members’ club
- Workplace and school canteens selling meals for employees or students for consumption on the premises
- On-board train catering for meals consumed in a dining carriage or specified on-board dining area
- Takeaway only establishments
- Catering services for private functions where the meals are provided as part of a wider catering service, which includes restaurants selling food and drink as part of an event
- Hotels with room service only or bed and breakfast where the breakfast is offered as part of a wider accommodation service
- Dining services such as packaged dinner cruises
- Mobile establishments
- Aircraft catering as there is not a restaurant area or designated dining area for consuming the meal
Informal seating areas such as tables and chairs on the pavement outside the van or takeaway are not recognised as consumption on the premises.
How the Eat Out to Help Out Scheme works
Scheme details are as follows:
- The discount can be offered by registered businesses on the later of when an establishment is registered for the scheme and 3 August 2020.
- The scheme operates during the opening hours on Monday, Tuesday and Wednesday from 3 to 31 August 2020, and is available on all qualifying food and drinks sold. The days are not negotiable.
- There is a 50% discount (maximum of £10/person, adult or child, inclusive of VAT) for food and/or non-alcoholic drinks purchased for consumption on the premises. There is no minimum spend and the discount offered must be 50% subject to the £10 limit, again the discount rate is not negotiable.
- There is no limit to the number of times customers use the offer during the period of the scheme.
- The scheme can be used in conjunction with other offers and promotions. The scheme discount would be applied after the other offers and after the deduction of the service charge.
- The discount is reclaimed by the registered establishment from the government.
It is not possible to use the scheme discount for:
- A person who is not eating or drinking within a dining party
- Alcoholic drinks
- Food and/or non-alcoholic drink purchased to be consumed off the premises
- Food and/or non-alcoholic drink sold at a private event within an eligible establishment
- Service charges.
Advertising the Eat Out to Help Out Scheme
HMRC has a public list of participating establishments https://www.tax.service.gov.uk/eat-out-to-help-out/find-a-restaurant/
It is possible to advertise the scheme using branded promotional materials or to utilise the free promotional materials from HMRC https://www.gov.uk/government/publications/eat-out-to-help-out-scheme-promotional-materials
How to register for and reclaim the discount
It is necessary to register for the UK wide scheme https://www.gov.uk/guidance/register-your-establishment-for-the-eat-out-to-help-out-scheme before offering any discounts to customers. Registration is instant. A reference number will be issued which is required when a reclaim is made. Registration will close on 31 August 2020.
Certain records must be kept for each establishment including:
- Total number of people who have used the scheme in the establishment
- Total value of transactions under the scheme
- Total amount of discounts given
Claims, which can be on a weekly basis, must be made between:
- The start of the claim period being the later of 7 days after registration and 7 August 2020; and
- 30 September 2020.
Other administrative points to consider:
- HMRC will pay eligible claims within 5 working days.
- VAT is still due on the full amount of the bill and money claimed will be treated as taxable income.
- There is further HMRC guidance on the scheme and how to make a claim including through gov.uk, webchats, live webinars etc. For more details https://www.gov.uk/government/publications/get-more-information-about-the-eat-out-to-help-out-scheme/get-more-information-about-the-eat-out-to-help-out-scheme#contact-help-and-further-support-from-hmrc