It’s August and coronavirus restrictions are slowly being lifted. Restaurants and bars are now allowed to open in the UK, and the Government has set out a scheme to encourage restaurants to open, and the public to eat out to help the businesses most affected by the pandemic.
In this article, I will outline the requirements for registering for the Eat Out to Help Out scheme, how to register, VAT considerations, and how to make a claim.
What is the Eat Out to Help Out Scheme?
The UK Government has established a scheme to encourage restaurants that were closed during the lockdowns to reopen and encourage the public to eat out and support these newly reopened restaurants.
The scheme provides a 50% discount to diners who eat at a participating restaurant on Mondays, Tuesdays and Wednesdays. The discount is only available on those days throughout the month of August 2020.
The discount only applies to food and non-alcoholic drinks (sorry folks, beer is still normal price) that are being consumed on the premises.
The maximum discount is £10 per customer, however, there is no limit to the number of times a customer can use the scheme.
The scheme started on August 3rd and will end on August 31st, 2020. The restaurant can claim back the discounted amounts.
Is my business eligible for the Eat Out to Help Out Scheme?
Most restaurants, cafes, and businesses that sell food and non-alcoholic beverages for consumption on-site are eligible.
This means that takeaway only restaurants, catering businesses, and food trucks with no permanent seating area are not eligible. Hotel restaurants are eligible, however, hotels that only offer room service are not.
The seating area can be shared with another restaurant but needs to be a permanent area for eat-in meals.
Your business must be based in the UK and had been registered as a restaurant or food business prior to July 7th 2020.
What documents do I need to register for the Eat Out to Help Out Scheme
If you meet the eligibility criteria, you can quickly and easily register online through gov.uk. You will need the following information to register:
- Government Gateway login information
- The date your business was established
- Your UK business bank information and billing address
- The name and address of each business you are registering (if less than 25)
- VAT number (if applicable)
- PAYE reference number (if applicable)
- Unique Taxpayer Reference (UTR) (if applicable)
How to register for the Eat Out to Help Out Scheme
The Government has made it very simple to register for the scheme. Make sure you have your documents ready, and then register on the UK Government website.
You will just need to log in using your Government Gateway ID, and then answer the questions in the application form and upload any relevant documents.
Once you have submitted your application, you will immediately receive a reference number that you will use to claim back the discounted amounts.
The business will also be put on a list of participating restaurants that the public can see and search online.
You cannot offer the discount until you are registered, so make sure you complete the registration prior to advertising the scheme.
What records do I need to keep under the Eat Out to Help Out Scheme?
Once you are registered, you can start offering a 50% discount on food and non-alcoholic beverages. You should only offer the discount if you believe the customer will be eating on the premises, i.e. not takeaways or delivery meals.
For each Monday, Tuesday, and Wednesday you are using the scheme, you should record the following information:
- The number of customers who used the scheme each day
- The total value of transactions that used the discount on each day
- The total value of discounts provided on each day
You must keep these records for each business registered under the scheme.
How to make a claim under the Eat Out to Help Out Scheme
You will be able to start claiming the money back starting on August 7th 2020, and you will need to wait at least 7 days from your registration date to make your first claim.
The last day you will be able to claim is September 30th, and the last day you can apply this discount is on August 31st.
Is it only possible to make one claim per week, and any payout you receive will be taxable income.
Once you have all of the required documentation, you can log in to HMRC, and enter the amounts to be claimed.
VAT on the Eat Out to Help Out Scheme
If you are a VAT registered business, after you have submitted a claim, you will need to submit your VAT return as normal.
Please be advised that you will still need to pay VAT on the order's total value before the discount is applied.
The Government also previously reduced the VAT rate for food businesses from 20% to 5% until January 12th, 2021. This does not include alcoholic beverages.
Why should I register for the Eat Out to Help Out Scheme?
Well, everyone enjoys a good discount! Customers will be more likely to eat at your establishment and ultimately bring you more business and revenue.
The scheme is very easy to apply for and the government aims to pay out the amounts within 5 working days.
It’s a great scheme to help businesses affected by the pandemic, as well as customers who may have lost income during the crisis.
Keep track of discounts using invoicing software
Invoicing software can make this process much easier for you. With invoicing software, like Debitoor, you can add a discount to the invoice total, or individual invoice line in a couple of clicks.
It is also possible to apply different VAT rates per item. Since the UK has cut the VAT rate for food businesses but not alcoholic beverages, this can easily be applied. Below is an example of discounts and VAT on an invoice under the scheme.
As you can see, a different discount and VAT rate can be applied to each invoice line if the order has food and soft drinks as well as alcoholic beverages. If the order only includes food and non-alcoholic beverages, you can simply add a discount to the order total. Easy as that!
In the end, this scheme will help any eligible business get back up and running after the lockdown period. If you want more information about the scheme, I would suggest going to the UK Government website.
Alternatively, if you have any questions regarding Debitoor invoicing software, feel free to reach out to team@debitoor.com. Happy feasting!
