Dear All
As you will know, the UK Government recently announced the Eat Out to Help Out Discount Scheme. The scheme, which is valid on Mondays, Tuesdays & Wednesdays throughout August 2020, gives a 50% Discount on food items, soft drinks and beverages (excluding alcoholic drinks) up to a maximum of £10 per guest.
We are trying to determine who wants to run the scheme via a modified version of WinPoS. Given the schemes limited duration (effectively 13 days) some users have decided not to use the modified software, others have expressed an interest, whilst most are yet to decide.
The System
The features needed to handle the discounting process will be embedded in WinPoS and in the new Customer Restaurant Table Ordering system (web based). The modified software will âlookâ for qualifying food/drink items, check that the date is valid and then prompt for the input of the number of seated customers.
The system will reduce the amount the customer has to pay by using one of two methods. The first is by discounting all qualifying items, as if applying a discount voucher. The second option is to generate a payment coupon equal to the amount of the saving, which the system would view in the same way as any other form of tender.
In addition to the above we will also provide a report that can be used to assist in the submission of claims.
Considerations
In deciding whether to use a Discount Voucher or a Payment Coupon the following should be considered:
- The way in which your sales history for food/drink items will appear for August 2020. If the discount voucher approach is taken it will appear that food/drink items are making very low, possibly negative, margins. Whereas if the payment coupon method is used only internal discounts will affect margins.
- The impact on the amount of VAT payable (at 5%). Unfortunately, no one, including HMRC, is clear on how to VAT should be calculated, which is exacerbated by the ambiguity of the sample bills shown on the Government web site.
Costs
WinPoS: We estimate that the modifications to WinPoS will take 8 days, at a cost £5,040 (ex VAT), which would be split equally amongst all adopters.
Submissions Report: We estimate that a new report to help in making submissions to HMRC will take 2 days at a cost of £1,260 (ex VAT). Once again, the cost would be shared among adopters.
Tableau Users Report: This can be used in place of the above report as it will give the same information, albeit in a slightly different format, and will cost £450 (ex VAT) per customer.
System Update: Will be required for each user, the cost of which will depend on individual configuration (estate size, etc). This will be quoted for separately.
Customer Restaurant Table Ordering System: each user of this web-based application will receive a quote for the necessary updates.
The Correct Calculation of VAT
IIKO (an EPoS software provider specialising in hospitality systems) approached HMRC for clarification regarding the calculation of VAT. They asked: “Is VAT due on the full value of the Bill Total before the applicable 50% discount on items is applied. Or is the VAT due on the discounted amount only?”
HMRCâs response was: “We do not have any information on this yet, guidance is expected soon, presently the only information we have is in relation to registering.”
IIKO then asked: âDo you know when this might be available?”, to which HMRC responded: “As the scheme was only announced last week it is still work in progress, we expect information about this ahead of the launch on the 3rd of August but have no specific dates yet.”
Given this lack of clarity and shortness of time to prepare, we suggest that you/we opt for the âpayment typeâ option as it favours HMRC in terms of the amount of VAT paid. In addition it does not skew Sales History by giving falsely low margins.
Please let us know your thoughts/decisions regarding this subject.
.
