Eat Out To Help Out: How It Works

Restaurants and other similar establishments can now sign up to the Eat Out to Help Out Scheme, an initiative devised by the government with the aim of protecting hospitality sector jobs by encouraging people to safely return to dining out.

The scheme will:

• operate all day, every Monday, Tuesday and Wednesday from 3 to 31 August 2020
• provide a 50% discount, up to a maximum of £10 per person, to diners for food or non-alcoholic drinks to eat or drink in
• allow the business to claim the full amount of the discount back from the government

There is no limit to the number of times customers can use the offer during the period of the scheme. Customers cannot get a discount for someone who is not eating or drinking.

It is expected that the discount will be offered during the whole of the opening hours on all the eligible days and on all qualifying sales of food or drink. The terms of the scheme cannot be changed – the discount offered must be 50%.

On registering, a business will be able to download free promotional material, including the campaign logo, and will be sent a display sticker. Establishments who have registered will be published on the GOV.UK website so the public can see who is taking part.

Eligibility

The scheme is open to any business UK wide which:

• sells food for immediate consumption on the premises
• provides its own dining area or shares a dining area with another establishment for eat-in meals
• was registered as a food business with the relevant local authority on or before 7 July. For new businesses, the application to the relevant local authority must have been made on or before 7 July 2020

“On the premises” means any area set aside for the consumption of food or non-alcoholic drink by that establishment’s customers and includes an outdoor seating area designated to the business.

It does NOT include informal outside seating such as a take-away or mobile van putting a table and chairs on the pavement.

Eligible businesses could include:

• restaurants
• cafés
• public houses that serve food
• hotel restaurants
• restaurants and cafés within tourist attractions, holiday sites and leisure facilities
• dining rooms within members’ clubs
• workplace and school canteens

The scheme is open to businesses which have used other schemes.

Businesses which are ineligible for the scheme include:

• an establishment that only offers takeaway food or drink
• catering services for private functions
• a hotel that provides room service only
• dining services (such as packaged dinner cruises)
• mobile food vans or trailers

In particular,

• a stall at a stadium or attraction must have a designated area for use by its customers to be eligible
• a restaurant in a hotel can use the scheme for food and drink sold for immediate consumption on the restaurant premises. This does not include food and drink that is purchased as part of a wider service.
• Catering on trains is only included if there is a specific area or dining carriage for dining. All other food and drink is excluded.

Applying the discount

The discount can be applied to food and/or non-alcoholic drink purchased for immediate consumption on premises, up to a maximum discount of £10 per diner (inclusive of VAT). There is no minimum spend requirement.

The discount cannot be applied to:

• alcoholic drinks
• service charges
• tobacco products
• food or drink that is to be consumed off premises
• food or drink that is sold as part of a private party, event or function taking place within an eligible establishment. This includes catering services for weddings and other events.
• food or drink that is provided as part of a wider accommodation service (such as a hotel providing a bed and breakfast service).
• food or drink provided by a workplace or school canteen that is paid for by the owner of the premises and supplied to employees or students for free.

If a customer is dining in and then takes away the remainder of their meal, the discount will still apply.

A diner is any person, adult or child, for whom food or drink is being purchased for consumption on premises. A diner does not need to be the paying customer.

In order to calculate the amount of the discount:

• start with the amount of the bill
• remove any ineligible items (such as alcohol and service charge)
• divide by the number of diners
• the discount per person is the lower of the amount calculated and the capped amount

VAT should still be charged on the full amount of the bill.

The scheme can be used with other offers and discounts. These should be applied first with the scheme discount calculated on the reduced amount of the bill.

Registration

Registration for the scheme is now open and will close on 31 August. An agent will not be able to apply on behalf of the business.

In order to register, a business will require:

• its Government Gateway ID and password (if it does not have one, it can be created on registration)
• the name and address of each establishment to be registered (unless more than 25 establishments are being registered – see below)
• the UK bank account number and sort code for the business which can accept BACS payments
• the address on the bank account for the business (this is the address on the bank statements)

The business may also require its:

• VAT registration number (if applicable)
• employer PAYE scheme reference number (if applicable)
• Corporation Tax or Self Assessment unique taxpayer reference

If registering more than 25 establishments that are part of the same business then details for each one do not have to be provided.

Instead, a link to a website which contains details of each establishment participating in the scheme, including the trading name and address, should be provided.

On registration the business will be provided with a registration reference number which will be needed for claiming repayments.

Records

The business should maintain a record, for each day the scheme is in operation, of:

• total number of people who have used the scheme
• total value of transactions under the scheme
• total amount of discounts given

If the scheme applies to more than one establishment then separate records should be kept for each.

Making a claim

Claims can be made on a weekly basis starting on 7 August 2020 although they can only be made 7 days after registrations. The service will close on 30 September. HMRC will pay eligible claims within 5 working days.

Any money received through the scheme will be treated as taxable income.

How can we help?

Please get in touch or contact your engagement partners at Simmons Gainsford if you would like more information or need any assistance.