One of the industries hit hardest by the pandemic has undoubtedly been the hospitality sector. However, the government recognises how core it is to our economy and is doing everything it can to help.
In the Summer Statement made on 8th July 2020, Chancellor Rishi Sunak made a number of announcements that have provided a ray of hope for the industry. We explore them here, and discuss what exactly they mean for your hospitality business.
From 15th July 2020 to 12th January 2021, hospitality enterprises can take a reduction in VAT. It will be cut from 20% to 5%, although it’s important to note that it applies to very specific payments.
For hotels and B&Bs, the cut is to VAT on accommodation. But for restaurants, pubs, cafés and takeaways, it affects eat-in or takeaway food, and non-alcoholic drinks.
Eateries will also benefit from the ‘eat out to help out’ scheme. Every Monday, Tuesday and Wednesday in August, people can purchase food and soft beverages and receive a 50% discount up to £10 per customer. This discount can be used an unlimited number of times.
For restaurants, pubs, cafés and their diners to be able to benefit from this scheme, eateries need to register and claim for it through this online government form.
The furlough scheme, which so many hospitality businesses made use of, is due to cease completely by October 2020. Instead, the government is working to encourage job retention by introducing a bonus.
Employers will receive this for every furloughed employee who returns to work, provided they stay until the end of January 2021. Businesses can only take advantage of this if the employee’s income is a minimum of £520 per month too.
The hospitality sector is one of the main employers of young workers, who are expected to suffer considerably from the economic crisis. The government is therefore introducing a £2bn fund that will help pay for six-month work placements for those aged 16-24 on Universal Credit. The scheme will run from 1st August 2020 to December 2021, though there’s the possibility it’ll be extended afterwards.
In essence, the government will cover the National Minimum Wage of these workers for 25 hours a week. There will also be a £1,000 grant for businesses that hire a trainee aged 16-25 for work experience. £2,000 will be granted for each apprentice under the age of 25, and £1,500 for apprentices over 25.
Finance help through Nabarro Poole
These are all positive announcements for the hospitality sector. With this support, hopefully the industry can get back to normal and businesses like yours can thrive again.
However, as lockdown eases and the pace picks up once more, you may find you don’t have the time to figure out how this support affects your finances. Nabarro Poole is here to help. We’ve been supporting SMEs in this sector for over 10 years, whether through budgeting and forecasting for the future or ensuring everyday compliance.
In times like these, a fantastic service is crucial – and that’s exactly what we provide. Just get in touch with our friendly team, and we’ll discuss what we can do for your business. Let’s talk today.