What is the Eat Out to Help Out Scheme Initiative?

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Restaurant owners are the benefactors the United Kingdom government for their latest initiative that will help kickstart the economy, by encouraging people to go out, which is the Eat Out to Help Out scheme.

At a time when businesses need support to remain in business, Chancellor Rishi Sunak announced the “Eat Out to Help Out” part of the summer statement 2020 initiative this week in order to help the United Kingdom’s hard-hit hospitality industry due to the effect of the COVID-19 pandemic. 

This radical, unique, and “first of its kind” initiative not only helps customers, who can avail of 50% discount for their sit-down meals in participating cafeterias, restaurants, and pubs across the country. The “Eat Out to Help Out” scheme also helps business owners get a much-needed boost in their earnings as the economy starts to safely reopen and recover from the three-month lockdown.

How the Eat out to Help out Scheme Works?

Participating restaurants, cafeterias, and pubs may start the registration process for the Eat Out to Help Out scheme by July 13 until registration closes on August 31.

Beginning August 3 until August 31, the registered establishments can start offering half-priced meals and non-alcoholic drinks to eat-in customers on Mondays, Tuesdays, and Wednesdays. A maximum of £10 per person, whether they are an adult or a child, is covered by the 50% discount. Excluded in this scheme are alcoholic drinks, the restaurant’s service charge, and takeaway meals. If a customer chooses to take their orders out after dining in, their orders are still covered by the 50% discount.

Business owners will be able to claim the discount back as the government will fully reimburse them each week, provided that they have records of the total number of people who have used the scheme in their establishment, the total value of transactions made under the scheme, and the total amount of discounts the business has given out. The amount reimbursed will be credited to the business’s bank accounts within five working days.

Another part of the “Eat Out to Help Out” scheme is also reducing the 20% VAT rate on the hospitality and tourism industry to 5% for six months beginning next week until January 12. This covers eat-in or takeaway food from restaurants, cafeterias, and pubs, accommodation in hotels, bed and breakfasts, campsites, and caravan sites, and attractions. This is another welcome change for most business owners in the industry, as they had to reduce operating days and even manpower because most of their customers chose to stay in due to the COVID-19 pandemic.

How Will the Initiative Help the Hospitality Industry

The United Kingdom’s hospitality industry is just one of the industries that have suffered the worst effects of the COVID-19 pandemic in the three months that businesses had to shut down. After Chancellor Sunak’s announcement to assure customers that it is safe to dine out and that the country is safely reopening the economy, shares in restaurant companies moved slightly higher.

Through the “Eat Out to Help Out” initiative, the government hopes to create new jobs and retain existing ones, and to protect its millions of workers in the hospitality industry. They also hope that the discount will encourage more members of the public to eat and to go out and give these businesses and the economy a much-needed boost.

About the Author

Annette Ferguson 

Owner of Annette & Co. - Chartered Accountants & Certified Profit First Professionals. Helping online service-based entrepreneurs find clarity in their numbers, increase wealth and have more money in their pockets.

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