Chancellor Rishi Sunak's headline 'Eat Out To Help Out' scheme for August, as announced in the Summer Statement, goes live tomorrow in food outlets across the UK.
Currently over 50,000 food establishments are fully signed up to provide a 50 percent discount to those who eat-in with a discount cap set at £10. This means a single diner spending £20 would receive £10 off their bill. A potential group of 5 people would save a combined £50.
The scheme runs throughout the month of August, but only on Mondays, Tuesdays and Wednesdays - traditionally the quietest days of the week for food outlets.
The discount is applicable only on food and non-alcoholic beverages, with diners not requiring any kind of voucher or coupon. There is no limit of how many times a diner receives benefit from the scheme.
To help calculate the discount we have produced an Eat Out To Help Out Calculator.
Restaurants eligible are those registered prior to July 7th, sells food that is to be eaten on the premises, and has access to a dining area. Takeaways are not eligible unless they have a dining area and food is being eaten on the premises.
Restaurants who sign up to the 'Eat Out To Help Out' scheme will have to make claims for the discounts they provide to diners directly through the government. It takes 5 working days for claims to be verified and paid out. If a business is not registered yet, they should register now as it takes up to 7 working days to get set up.
The government has a set up an online search website to allow people to check which restaurants are using the scheme in August, you can use the eat out to help out search on the gov.uk website.
A quick rundown of the most well-known franchise restaurants shows names like:
- Ask Italian
- Burger King
- Caffé Nero
- Costa Coffee
- Five Guys
- M&S Café
- Pizza Express
- Pizza Hut
- Pret A Manger
- Turtle Bay
- YO Sushi
- ...and many more
The scheme is hoped to bolster measures already introduced to support the hospitality trade in the UK, such as the VAT cut. VAT has been cut from 20 percent to 5 percent for restaurants, pubs and hotels for a six-month period.
The VAT saving is passed directly to consumers as VAT is normally charged as a collection duty by the restaurant and passed on to the exchequer. So, a meal costing £10 to the consumer would normally have £1.67 in VAT (pre-VAT cost is £8.33). A cut from 20% to 5% means a VAT reduction to £0.42 - so the consumer would only pay £8.75 at the till. A saving of £1.25.
The VAT cut is costing the government £4 billion over the next six months, whereas the 'eat out to help out' scheme is costing £500 million for the 13 days of August 2020 it runs.
A rule of thumb is a VAT saving of £1.25 for every £10 usually spent in restaurants, pubs and hotels.