CORONAVIRUS: Eat Out to Help Out Scheme - Registration Open

Eat Out to Help Out Scheme - Registration Open

As a reminder, the scheme will commence next Monday but restaurants must register in advance of offering the scheme and claims can only be made 7 days after registering. Claims can be made between 7 August and 30 September for the periods:

• 3 to 5 August
• 10 to 12 August
• 17 to 19 August
• 24 to 26 August
• 31 August

The Government guidance has been updated to confirm that the discount can be applied to soft drinks and/or packaged snacks, as long as they are for immediate consumption on the premises.

The guidance has been updated with a number of examples which show:
  • How to calculate the VAT based on the pre-discount amount of the bill.
  • How other discounts offered are deducted before the scheme is applied. If the other discount applies to items not eligible under the scheme (such as alcohol) the amount disallowed from the total is reduced in proportion.
  • From the example, a bill of £120, including £40 on alcohol, has a 10% discount applied. Therefore, the bill after the discount is £108 (90% of £120) but the deduction for the alcohol is only £36 (90% of £40) and so the scheme can be applied to the bill of £72.
  • When an alcoholic drink is included in a meal price, the normal price of the drink must be deducted from the meal price to establish the amount that can be discounted under the scheme.

The Government has also produced a YouTube video and live webinar which explain how the scheme works and established a webchat service and dedicated helpline.

Why not paying your employees’ personal fuel costs may be in their best interest

As we are now coming out of lockdown, employers will start receiving claims from employees who are provided with fuel. However, it may be in both the employer’s and employees’ best interests for these not to be paid.

Whilst the amount of fuel used during the lockdown period is likely to be low, this does not reduce the income tax arising on the Benefit-in-Kind (BIK). Therefore, it is possible for the resulting tax liability to exceed the amount reimbursed.

In general, the fuel BIK is determined by the multiplier set by HMR&C, which is £24,500 for 2020/21, and the charge varies between 3% and 37% depending on the vehicles’ CO2 emissions. The BIK for the 2019/20 tax year will have been shown on the P11d recently issued.

If the fuel usage across a period is less than the BIK, then it is in the employee’s interest for the employer to withdraw the benefit for the relevant period. In order for the BIK to be stopped, the employer must stop paying for any of the fuel. There is no minimum period for this withdrawal but the benefit can only be stopped and restarted once in any tax year.

Monday, 3rd August, 2020