VAT cut to 5% today for hotels and restaurants – all the businesses slashing prices named - The Sun

Rabu, 15 Juli 2020

VAT cut to 5% today for hotels and restaurants – all the businesses slashing prices named - The Sun

KFC and Wetherspoons are among the major businesses to pass on VAT cuts to customers from today.

It comes as VAT is slashed from 20 per cent to 5 per cent for businesses in the hospitality and tourism industries across the UK under measures first announced in chancellor Rishi Sunak's mini-Budget last week.

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Hotels and restaurants will benefit from a VAT cut from today, as announced by chancellor Rishi Sunak (pictured), but will they pass savings onto customers?

The cuts will last for six months until January 12, 2021 with the idea being that businesses will pass on the tax savings to households in the form of lower prices.

What's included in the VAT cut?

Booze is excluded from the VAT cut, but it will apply to food and non-alcoholic drinks eaten in at restaurants, pubs, bars, cafés and other similar premises across the UK.

Hot takeaways will also be covered, but cold takeaways won't be - some items such as pre-prepared cold takeaway sandwiches are already VAT-free.

Full list of businesses where VAT will be cut

THE VAT rate will be slashed for the hospitality and tourism industries in order to help them bounce back from the coronavirus crisis.

Restaurants, cafes and pubs
Hotels, inns, boarding houses and similar establishments
Holiday and caravan parks and other holiday accommodation businesses charging fees for tent pitches or camping facilities
Shows
Theatres
Circuses
Fairs
Amusement parks
Concerts
Museums
Zoos
Cinemas
Exhibitions
Similar cultural events and facilities

It will also apply to accommodation and on admission to attractions. See the full list in the box below.

How much will I save?

If the savings are passed on in full, it means cuts of 12.5 per cent on the end price people pay.

The Treasury expects typical savings of £160 a year, which it hopes will encourage people to start spending in a bid to boost the floundering economy, which yesterday posted growth of just 1.8 per cent.

But it warns that it won't force businesses to pass savings on, saying it understands many have struggled without an income for months during lockdown.

It adds that almost four in five businesses (78 per cent) reported passing on savings when VAT was reduced in 2008.

Which businesses will pass on VAT cuts?

Here's a round-up of some of the businesses that have announced VAT cuts:

Accor Hotels - Ibis, Mercure, Novotel, Sofitel - full savings passed onto future bookings and to food and drink

Ibis says it will pass on the savings in full to eligible food and drink prices and to hotel bookings from today.

But it won't apply the changes to current bookings for future stays.

KFC - varying price cuts but not across the whole menu

KFC isn't cutting all menu items by a blanket 12.5 per cent.

Which businesses will pass on VAT cuts?

HERE are the major businesses that have so far confirmed they'll pass on VAT cuts to consumer:

Accor Hotels - Ibis, Mercure, Novotel, Sofitel
KFC
Marriott
Park Holidays
Wetherspoon

Instead, KFC will reduce the price of sharing buckets by £1 and slash the cost of "fan favourites" by 50p.

It's also introducing a limited time deal on its Boneless Banquet, which will see the price cut by 50 per cent from £10 to £4.99 until July 19.

Marriott - full savings passed onto future and current bookings

Hotel chain Marriott says the full VAT cut will be passed on to future bookings, while those with forward bookings who have already paid will receive a credit for the VAT difference upon check-out or have that amount off-set against any spending during their stay.

McDonald's - Happy Meal and Big Mac price cuts

McDonald's has recommended that franchisees reduce prices on classics such as the Big Mac, quarter pounder with cheese and six chicken McNuggets.

This includes a 40p reduction on Extra Value Meals, 30p for every Happy Meal, and 50p on breakfast meals.

The McCafe range is also set to reduce prices, offering black and white coffee for 99p and premium coffees such as cappuccino and latte for £1.49.

But some items will remain the same price, including desserts and cold drinks.

And the roll back only applies to takeaway and drive thru orders - not to McDelivery. Franchisees also don't have to follow the chain's recommendations.

Park Holidays - full savings passed onto future bookings

Park Holidays, which owns 31 campsites across the UK, says it too will pass on the full VAT savings to future bookings and to existing ones where holidaymakers have yet to pay.

Wetherspoons - varying cuts of up to 28 per cent

Wetherspoons is spreading the cuts across food items, coffee, soft drinks and ale with some items falling in price by up to 28 per cent.

Other items will, however, fall by a smaller 4 per cent or see no decrease at all.

It is, however, still deciding what to do for future bookings that have already been paid for.

Cuts to VAT come alongside the government's new Eat Out to Help Out scheme, which is offering additional savings of up to £10 a head on meals out during August.

Harvester and Pizza Hut are among the firms to sign up for this separate scheme.

Chancellor announces six-month VAT cut, from 20% to 5%, for the hospitality sector, and half price restaurant meals for all in mini-Budget boost for staycations

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2020-07-15 05:00:00Z
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Rabu, 15 Juli 2020