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Katie Harris
Katie Harris ,
ASSOCIATE - SOLICITOR
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Chancellor’s Announcement a Boost for Hospitality Sector
09 July 2020

The Chancellor yesterday unveiled a package of support to help businesses retain jobs and encourage customers through the door. Acknowledging the importance of the hospitality sector in playing an integral part in getting the economy moving again, the measures include:

  • A reduction in VAT on most hospitality and tourism related activities from 20% to 5% for the next 6 months. This reduction will apply from 15 July until 12 January 2021;
  • The ‘Eat Out to Help Out’ scheme which will give customers a 50% discount on sit-down meals at participating restaraunts, pubs and cafes up to a maximum of £10 per head on Mondays, Tuesdays and Wednesdays during the month of August. Participating businesses can reclaim the money back from the Government with the funds to be placed into their bank account within five working days;
  • A Job Retention Bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021; and
  • A £2 billion ‘Kickstart Scheme’ to create hundreds of thousands of new, fully subsidised jobs for young people across the country. Funding will be available for those aged 16-24, claiming universal credit and at risk of long term unemployment. Under this scheme, the Government will provide funding of 100% of the National Minimum Wage for 25 hours per week for each 6 month work placement. This funding can be topped up by employers.

Further details of these schemes will be published in the coming days.

The Government hopes that the combined effect of these measures will help to secure jobs and prop up the sector by ensuring there is sufficient demand in business, and the confidence to protect jobs and rehire. These measures have come as welcome news to the industry, which has been particularly hard hit as a consequence of the Covid-19 pandemic. However, many in the hospitality industry claim this hasn’t gone far enough, and further measures may be necessary to ensure the long term survival of many struggling businesses.

Boyes Turner are currently advising a number of clients in the hospitality and leisure sector on the impact of Covid-19 upon their business and employment needs. If you or your business require advice and assistance on how these new measures may impact your business or staff, and in particular in relation to the retention of staff under the current Furlough scheme, please don’t hesitate to get in touch.

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

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