PROTECTING
JOBS


The focus of the Chancellor’s statement for job protection was on the hospitality and tourism sectors. He emphasised that:
  • these sectors are amongst the highest employing sectors across the UK
  • although firms have received support, the nature of their businesses means that as a result of lockdown many of these businesses still face great challenges
  • workers in the hospitality sector are disproportionately young, with fewer qualifications and are more likely to be unemployed for a long time if they lose their jobs. Such workers are also likely to be female or from a Black, Asian or minority ethnic background.
In the next step towards recovery, the government considers the best way to secure jobs in these sectors is to support demand for these businesses. Measures will therefore be introduced to encourage people to return to their normal habits and make the most of the reopening of businesses within these sectors. The following measures will be introduced.

Temporary VAT cuts

From 15 July 2020 to 12 January 2021, the reduced rate of VAT will apply to:
  • supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises across the UK
  • supplies of accommodation and admission to attractions across the UK.
Comment

The reduced rate is 5%. The reduced rate currently applies to a restricted range of goods and services such as electricity and gas for domestic and residential use. The rate reduction is rather more than some commentators were predicting.

Further guidance on the scope of these reliefs has now been published by HMRC. More information is here bit.ly/2DrjsTR.

Eat Out to Help Out

In order to support around 130,000 businesses and to help protect the jobs of their 1.8 million employees, the government will introduce the Eat Out to Help Out scheme to encourage people to return to eating out. 
This will entitle every diner to a 50% discount of up to £10 per head on their meal, at any participating restaurant, café, pub or other eligible food service establishment. The discount can be used unlimited times and will be valid Monday to Wednesday on any eat-in meal (including on non-alcoholic drinks) for the month of August 2020 across the UK. Participating establishments will be fully reimbursed for the 50% discount.
Further details have now been published and are available here bit.ly/3edB9D0.