Introducing VAT changes and the Eat Out to Help Out scheme in the UK
The UK has recently introduced VAT changes and an Eat Out to Help Out scheme for the UK hospitality industry. To ensure our Lightspeed Restaurant users in the UK are compliant with these recent changes, please read below:
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VAT changes
The UK has recently cut the Value Added Tax (VAT) on dine-in food, hot takeaway and non-alcoholic drinks from the current 20% standard rate to a reduced rate of 5%. The tax rate for alcohol and cold takeaway does not change. The measure will be in place from July 15, 2020 until January 12, 2021. Read the full overview of the VAT reduction here.
To accommodate the new VAT rule, please adjust the following settings on your Lightspeed Restaurant account:
- From Restaurant Manager, go to Products > Categories. Manually update the new VAT rate (5%) for all categories containing dine-in, hot takeaway and non-alcoholic beverage products. Do not adjust the VAT rate for alcohol or cold takeaway product categories. Manually adjusting your product categories is the best way to ensure all products within the affected category include the correct VAT rate.
- If your establishment uses Combos, ensure the new VAT rate has been applied to any applicable products within the Combo. First, follow the steps above for adjusting the VAT rate on your product categories. Then, go to Products > Products and select the relevant combo to verify.
For more information on creating a new product category and adjusting tax rates, view our tutorial here.
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Eat Out to Help Out scheme
The Eat Out to Help Out scheme (running on Mondays, Tuesdays and Wednesdays from August 3rd – 31st) offers a discount to dine-in customers and encourages them to eat at your restaurant. Learn more about the UK’s Eat Out to Help Out scheme.
To accommodate the requirements to support this scheme, we suggest following the steps below:
From Restaurant Manager:
- Verify app settings:
- To comply with the Eat Out to Help Out scheme, your business must specify the number of diners per order.
- Ensure that Table Service is enabled on Devices > Restaurant App Settings for all devices handling dine-in orders.
- Then, go to Settings > App Settings and turn on the Enable number of customers popup.
- Create a 50% discount:
- This discount will be used on the POS to help users calculate the discount amount.
- To create a discount, go to Products > Products > Add Discount.
- From the drop-down list, choose Discount Type Reduction ticket %.
- Give the discount a clear name (such as Eat Out to Help Out).
- Link applicable Product Categories to the discount (all dine-in food and non-alcoholic drinks).
- Ensure user permission Allow add discount is active for users to apply discounts on the POS. Learn more about adjusting user permissions.
- Create a payment type:
- This payment type will be used on the POS on all applicable transactions to isolate the Eat Out to Help Out discount amount.
- Go to Payments > Payment Type > Add Payment.
- Give the payment type a name (such as Eat Out Help Out).
- Select the type as Cheque.
From Restaurant ePOS:
- Select a table to start a dine-in order and specify the number of diners included on each order (on Mondays, Tuesdays and Wednesdays only).
- If the total of the Eat Out to Help Out discount is less than £10 per diner: add the Eat Out to Help Out payment type and enter the amount of the discount. The balance will be paid by the guest.
- If the total discount is greater than £10 per diner: add the Eat Out Help Out payment equal to £10 discount for each applicable diner. The balance will be paid by the guest (ie,. 4 guests x £10 = £40).
Tips for calculating the discount:
- If users need help calculating the amount of discount on a receipt, they can temporarily add the newly created 50% discount type to the transaction to isolate the eligible discount amount.
- Once you have calculated the eligible discount, remove the discount from the order (by swiping left or long-press). The discount must be removed before applying payment to ensure the gross VAT is applied for the transaction.
- Then, apply the Eat Out to Help Out payment type and enter the amount of the discount.
Reporting for government claim:
- From the Restaurant Manager go to Reports > Summary report and select the days the Eat Out to Help Out scheme is available (August 3rd to August 31st).
- View the Category section for a summary of the total transaction value of each eligible category.
- View the Totals section for a summary of the total number of customers.
- View the Eat Out to Help Out payment type for a summary of the total discounts applied.
Learn more about offering discounts during the Eat Out Help Out scheme here.
For any further questions, please contact our Support team.