5% VAT for hospitality, £1K bonus for returning employees and £10 meals for everyone

Rushi Sunak

Chancellor Rishi Sunak will not extend the furlough scheme beyond October but he has announced a Job Retention Bonus scheme which will see employers paid a bonus of £1,000 for every employee they bring back off furlough and employ until January. The hospitality industry will see VAT  reduced to 5% for food and accommodation and a new Government Scheme “Eat Out to Help Out” to incentivise customers to eat out is being introduced for August.

He said in his statement,  “We can’t protect every job but we can get as many people as possible from furlough back to their jobs. We are introducing a new policy to reward and incentivise employers who bring employees back off furlough with a new jobs retention bonus – if you bring someone back and continuously employ them to January 2021 there will be a £1K bonus per employee.”

With regard to hospitality and tourism, he said, “Our economy relies on consumption especially social consumption. The best jobs programme we can do is restart these sectors and get them bustling again. We need to give these businesses the confidence to know that demand will be there so today I am introducing two new measures to get these sectors moving and protect jobs – VAT on hospitality and tourism will for next six months be cut for food accommodation and attractions to 5% from Wednesday to January 12th.”

He continued, “The final measure has never been tried before in the UK. To get customers back into restaurants cafe and pubs and protect the people that work in them for the month of  August we will give everyone in the country an ‘eat out to help out’ discount meal eaten at any participating business. Monday to Wednesday there will be a 50% discount, up to the value of £10 per head,  for everyone including children. Businesses will need to register and can do so website open Monday.  Each week in August businesses can claim the money back and will get the money back in their accounts in five working days.

He revealed a Kickstart scheme which will pay employees directly to create new jobs for 16-24-year-olds which will see the Government pay their wages for six months as long as they are employed for 25 hours a week and the job is a good quality job. For 24-year old employers would get a grant of £6,500. Employers can employ be part of scheme from next month and they can hire as many people as possible. Said Rushi, “There is no cap on the number of places available.”

The Government will also pay employers £1,000 per trainee they take on as well as, for the next six months, paying employers £2,000 to create new apprenticeships. There is an added incentive of a bonus payment of £1,500 to take on people over the age of 25 years old.

Marc Crothall, Chief Executive of the Scottish Tourism Alliance said, “The series of support measures announced by The Chancellor this afternoon are hugely welcomed by Scotland’s tourism industry and go beyond what we had anticipated in terms of the lowering of VAT to 5%.  The STA, along with our counterparts at UK Hospitality have campaigned heavily for years for the UK government to cut VAT to 5%; this represents a huge catalyst for the tourism economy and I know this news will come as a huge relief today for thousands of pubs, restaurants, accommodation providers and visitor attractions across Scotland and their employees whose jobs have been given increased protection.

“The “kick start” scheme to create more jobs for young people is a huge boost for the tourism sector, as indeed is the announcement of support for businesses taking on new apprentices with the under 25s representing such a large proportion of our workforce, however we will continue to push for support for all employed in the tourism sector.  Further tailored support for older people within the sector is still required as the stark reality of the unemployment crisis looms large.

“Incentivising the public to support our hospitality industry was one of the recommendations the STA made to the Independent Advisory Group on Economic Recovery and I am pleased to see that this has been included in the raft of support measures announced today for the tourism sector.  We must remember that while August marks the start of the school holidays south of the border, Scots are already planning staycations and days out throughout July so we will be pushing for the ‘Eat Out to Help Out’ initiative to be brought forward in alignment with the reopen date of Scotland’s tourism industry on 15th July.”




Category: Coronavirus, Editors' Picks
Tags: Bonus, furlough, hospitality, Kickstart, Rishi Sunak, Trainees, VAT