The US hospitality industry is in dire straits and lacking governmental support. Yet, across the pond, the English cousins took some preliminary steps to bolster their reopened bars and pubs. On Wednesday (7.08), Chancellor Rishi Sunak unveiled a stimulus plan for the service industry that included incentives for diners and employers alike.
The £2bn stimulus package touts the slogan “Eat Out, Help Out” and aims to drive customers to restaurants and bars.
For starters, Sunak announced a six month cut in VAT taxes from 20% to 5% for businesses including restaurants, pubs, and hotels.
Note to Yanks: The VAT (Value Added Tax) is basically a luxury sales tax in England. So, the fee is included in the price when one purchases items like meals out, but other items such as food at the supermarket or children’s clothes are exempt.
Sunak also announced that the government will subsidies 50% off vouchers (up to £10 a head) for diners. The deal will be available Mondays through Wednesdays in August. The Chancellor promised that businesses that file through a government website will be reimbursed for these vouchers within five business days.
“I know people are cautious about going out. But we wouldn’t have lifted the restrictions if we didn’t think we could do so, safely,” he told Parliament.
Finally, Sunak stressed that restaurants and pubs are also eligible for £1000 payments for every staff member that returns from furlough and is retained through January 1.
The English hospitality industry applauded the package as a start, but called for additional measures, specifically rent relief.