The government’s £4.1bn of VAT has come into force and food chains such as McDonald’s and Pret A Manger are set to cut their prices for customers.
Chancellor Rishi Sunak announced that there will be VAT cuts on hot meals, accommodation and attractions from 5% up to 20% over the next six months.
Many other food outlets and hospitality firms will not benefit from the full tax cut after taking huge hits from the pandemic.
Bernard Donoghue, director of the Association of Leading Visitor Attractions (Alva), told the BBC, that he thinks the tax cut will help venues “repair their finances as opposed to being passed on to customers.”
McDonald’s are planning price cuts on popular items such as Big Macs, Quarter Pounders and McNuggets, by 50p and Happy Meals by 30p.
Pret have announced the price of a take away Latter will be reduced by 35p to £2.40 due to the tax break, passing on the temporary tax break to customers.
Chancellor of the Exchequer Rishi Sunak told the House of Commons last Wednesday that all Britons will be given a 50% discount on food.
This is to encourage Brits to go out to restaurants in an attempt to boost the hospitality industry and help the economy. The 50% discount is up to a maximum discount of £10 per head at participating restaurants, cafes and pubs from Monday to Wednesday.
The Chancellor told MPs in the Commons last week, “I can announce today that, for the month of August, we will give everyone in the country an ‘Eat Out to Help Out’ discount.
“Meals eaten at any participating business, Monday to Wednesday, will be 50% off, up to a maximum discount of £10 per head for everyone, including children.
“Businesses will need to register, and can do so through a simple website, open next Monday.
“Each week in August, businesses can then claim the money back, with the funds in their bank account within five working days.”
VAT will be cut to 5% on hospitality and tourism with the government backed grant for people to eat out from August.
The VAT cut will be for the next six months from 20% to 5% – a “£4bn catalyst” for the sector, which is designed to help protect 2.4m jobs.