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VAT reduction for tourism and hospitality sectors

Wed 8 Jul 20

Chancellor Rishi Sunak has announcement that VAT in the hospitality and tourism sectors on food, accommodation and attractions will be cut from 20% to 5% as part of the Government’s three phased economic response to the COVID-19 crisis. 

The statement is part of a £30 billion plan to prevent mass unemployment and kickstart the tourism industry amongst economic uncertainty. The VAT cut will apply to eat-in or hot takeaway food and non-alcoholic drinks from restaurants, cafes and pubs, accommodation in hotels, B&Bs, campsites and caravan sites, attractions like cinemas, theme parks and zoos.

To further help the tourism industry recover, the Chancellor also announced that in the month of August, an ‘Eat Out to Help Out’ discount will be available in participating businesses providing a 50% discount with a maximum of £10 per head, between Monday and Wednesday. The businesses will then be allowed to claim the money back within five working days. A website for businesses to register will go live next Monday.

The government will also pay firms a £1,000 bonus for every staff member kept on for three months when the furlough scheme ends in October.

'Job Retention Bonus' will also be introduced to help firms keep furloughed workers. UK Employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021.

This initiative forms part of a £4 billion catalyst benefiting over 150,000 businesses, and consumers everywhere - all helping to protect 2.4 million jobs. 

Read the full Government announcement about the plan for jobs scheme.

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