Rishi Sunak, Chancellor of the Exchequer, announced a series of support measures in today’s mini-budget statement to support selected industries worst hit by the effects of coronavirus. As the food and hospitality industry is yet to return to full capacity as a result of coronavirus social distancing measures, the Summer Budget focuses on rebuilding the economy and bolstering the performance of restaurants, accommodation providers and the housing market.
The measures announced by Rishi Sunak include a VAT reduction for the food and hospitality sector, a discount for diners and an exemption to Stamp Duty.
Eat Out To Help Out: Discounts for Diners throughout August
Speaking to the House of Commons, Rishi Sunak unveiled the ‘Eat Out To Help Out’ initiative to encourage diners to direct custom to restaurants, following the easing of lockdown measures on 4 July. As an attempt to inject cash into the industry which was subject to forced closures, diners will be able to benefit from a discount by eating out during August.
Every member of the public in England, including children, will benefit from 50 per cent off meals up to a maximum discount of £10 per person when dining at participating restaurants in August on Mondays, Tuesdays and Wednesdays.
Restaurants interested in participating will be required to register through a website which will be operational from 13 July.
VAT Reduction for Food and Hospitality sector
The Chancellor announced the reduction of VAT for the hospitality and food industry from 20% to 5%. The measure will be effective from 15 July 2020 until 12 January 2021. This applies to “eating hot or takeaway food from restaurants, cafes and pubs, accommodation in hotels, B&Bs, campsites, and caravan sites,” said Rishi Sunak. The reduction intends to give business owners the confidence to reopen their doors following the lockdown.
Stamp Duty exemption on homes under £500,000
Sunak announced the removal of stamp duty on houses worth up to £500,000 until 31 March 2021 to stimulate house buyers, effective immediately. Removing Stamp Duty could see the ‘average stamp duty bill fall by £4,500’ and nearly nine out of 10 people buying a main home this year to pay no stamp duty at all,” said Rishi Sunak. The Stamp Duty threshold for home buyers is currently £125,000 and £300,000 for first-time buyers, however, the temporary threshold will help boost the reopening of the housing market and encourage house sales before Spring 2021.
The measures announced by the Chancellor are designed to kick start the repair of the UK economy following an unprecedented trading period as a result of Covid-19. As the following measures widen the door for prospective business buyers, your role could be instrumental in business continuity and contributing to the UK economy during this turbulent period. If you’re interested in buying or selling a business, contact the Selling My Business team.