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:

  1. 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. 
  2. 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:

  1. Verify your app settings:
    • 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.”
    • To comply with the Eat Out to Help Out scheme, your business must specify the number of diners per order. 
  2. Create a 50% discount (e.g. “Eat Out Help Out 50% Discount”):
    • From the drop-down list, choose Discount Type “Reduction ticket %.”
    • Link applicable Product Categories to the discount (all dine-in food and non-alcoholic drinks).
  3. Ensure user permission “Allow add discount” is active for users to apply discounts on the POS.  Learn more about adjusting ePOS user permissions.
  4. Create a new Payment Type for applicable transactions. Go to Manager > Payments > Add a new Payment. Give the payment type a name (ie, Eat Out Help Out) and select the type as Cheque.

From Restaurant ePOS:

  1. On Mondays, Tuesdays and Wednesdays only: Select a table to start a dine-in order and specify the number of diners included on each order.
  2. 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.
  3. 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: 

  • Temporarily add the Eat Out to Help Out 50% receipt discount to the order to isolate the eligible discount amount.
  • Remove the discount from the order (by swiping left or long-press). It must be removed before applying payment to ensure the gross VAT is taken into account for payment.

Report for government claim:

  • From the Restaurant Manager go to Reports > Summary report > select the days the Eat Out to Help Out scheme is available
    1. View the Category report to get a summary of the total transaction value of each eligible category 
    2. View the Totals section to get the total number of customers
    3. View the “Eat Out to Help Out” payment type for total discount applied

Learn more about offering discounts during the Eat Out Help Out scheme here

For any further questions, please contact our Support team.