Helping you prosper

In and out: what’s the discount about?

13 July 2020

It’s one of the peculiarities of the English language that two seemingly opposite phrases can mean pretty much the same thing. Take ‘eating out’ and ‘eating in’ – dependent on the perspective, they’re the same. The customers are eating out, even though they’re in a restaurant and to the restaurant owner, the customers are eating in, as opposed to taking away.

The Government’s latest catchphrase, ‘Eat Out to Help Out’, rapidly becoming EOHO, reflects the customer’s perspective. However, looking at the rules that apply to the discount, as they need to be applied by the relevant eateries, it becomes apparent that the discount applies to eating in. Maybe ‘Eat In to Chip In’ wouldn’t, erm, cut the mustard?

Looking at the detail, let’s first consider to whom this applies, which is those establishments that:

  • sell food for consumption on the premises,
  • provide their own dining areas or share a dining area with other establishments for eat-in meals, and
  • were registered as a food businesses with the relevant local authority by 7 July 2020.

It does not apply to establishments that:

  • only offer takeaway food or drink,
  • cater for private functions only,
  • are hotels providing room service only,
  • are dining services (such as packaged dinner cruises), or
  • are mobile food vans or trailers.

Businesses can register on-line via their Government Gateway account and will need to give the name and address of each outlet participating, unless there are more than 25, and relevant details such as VAT numbers, tax references and PAYE references.

As ever with all COVID-19 assistance, there’s the warning that certain records must be kept, in this case:

  • total number of people who have used the scheme in the establishment,
  • total value of transactions under the scheme, and
  • total amount of discounts given.

There’s also the warning that applications will be reviewed by HMRC and that dishonest or fraudulent applications will be rejected.

The scheme runs from 3 August to 31 August 2020 and applies only to Mondays, Tuesdays and Wednesdays, both during the day and in the evening. Claims can be made from 7 August and the claims portal will close on 30 September 2020.

To what does the discount apply? The charges for any food or drink consumed in locations as outlined above, except for alcoholic drinks and service charges. The discount is the lower of 50% of the value charged and £10 per head. For two or more diners, it’s not necessary to consider what each diner has, so a big eater and a small eater dining together should enjoy the same discount as two moderate eaters.

A typical meal at my local Indian restaurant comes to about £20 per head, including the obligatory Cobra, Kingfisher or Mongoose. That’s about £15 per head on food, so, if there are 4 of us eating, we’d expect a discount of £30, which, admittedly, might end up as a tip and more beer!

Alternatively, a meal out with my partner may cost £80, including a bottle of wine at £25 and a service charge of £7.50. This would give us a discount of £20, being the £10 maximum discount per head.

All of which is a valuable discount and hopefully it will encourage us all to return to eating out. Of course, it remains to be seen whether all establishments will apply to join the scheme and whether those that don’t will be at a competitive disadvantage to their rivals.

If you have queries on understanding how the EOHO scheme applies to you, or how the temporary reduction in VAT for the hospitality sector may affect you, contact your local UHY adviser.