The Covid-19 crisis has hit businesses hard over the last few months and has particularly affected those within the hospitality sector. Partner from leading Yorkshire
Law firm Keebles LLP Craig Law comments on how Chancellor Rishi Sunak’s mini-budget announcement will come as some hope for hospitality businesses across the region re-opening post lockdown:
Craig says: “In a bid to support the hospitality industry and to protect jobs the Chancellor announced that the rate of VAT would be cut from 20 per cent to five per cent from the 15 July. The rate cut will apply to all food and drink (but not alcohol), accommodation and attractions and will last for a six-month period.
“The ‘Eat Out to Help Out’ scheme provides a 50 per cent reduction for sit down meals up to a maximum value of £10 per head across the whole of the UK between Monday and Wednesday throughout the month of August. Not only will this initiative support the industry it is also hoped it will act as a catalyst to increase demand and get people eating out again.
“It has been estimated that if the two schemes are fully accessed that it will cost the exchequer approximately 3.5 billion with the VAT cut being the largest cost at 3 billion.
“Despite the cost, the new measures have been widely welcomed by the industry as positive news.
“The ‘Rishi Meal Deal’ is clearly the headline grabber but there is some real substance behind the VAT cut for the hospitality sector. This will provide a much-needed boost and has been well received by our clients in the hotel and leisure world.”