Diners will get a 50% discount off their restaurant bill during August under government plans to bolster the embattled sector.

People who dine out Monday to Wednesday in August will only have to pay for 50 per cent of the tab, chancellor Rishi Sunak announced today.

He unveiled the "eat out to help out" discount as part of a series of measures to restart the economy amid the coronavirus pandemic.

The deal means people can get up to £10 off per head if they eat out between Monday and Wednesday.

A Treasury document said the discount can be used "unlimited times".

It will be valid from Monday to Wednesday on any eat-in meal - including non-alcoholic drinks - at any participating restaurant, cafe, pub or other eligible food service establishment across the UK.

Establishments will then be reimbursed for the 50% discount, the document said.

Speaking in the Commons, the DUP's Sammy Wilson (East Antrim) joked: "I think the clothes shops might welcome it as well, as once we've eaten our way through a month's half-priced meals, we might all be visiting them."

The Chancellor replied: "Perhaps alongside 'eat out to help out', we can make progress on reopening our gyms so at the same time we can deal with that side of the equation."

Tory former minister Tim Loughton added the Government's message should be "eat out to help out to work out".

Mr Sunak said: "I wholeheartedly agree with him about gyms and hopefully, as the Prime Minister has indicated previously, he's keen to see progress made there as well."

Mr Sunak also said VAT on hospitality and tourism would drop to 5%.

The reduction, from 20%, will be in place for the next six months.

He also announced that tourism and hospitality VAT will be cut from 20% to 5% for the next six months in his "mini-budget" announcement.

The move will cut the tax on eat-in and hot takeaway food from restaurants cafes and pubs, which have started to reopen over the past week.

Mr Sunak also said the move will benefit accommodation in hotels, B&Bs, campsites and caravan sites, while attractions such as cinemas, theme parks and zoos will also see the tax cut.

It will be reduced from Wednesday July 15 until January 12, he told MPs.

He added: "This is a £4 billion catalyst for the hospitality and tourism sectors, benefiting over 150,000 businesses, and consumers everywhere - all helping to protect 2.4 million jobs."

Russell Nathan, senior partner at accountancy firm HW Fisher, said: "Our restaurants, pubs, shops and hotels are struggling.

"This is a timely announcement from Government as businesses are in desperate need of a clear action plan.

"It is vital we see the hospitality industry back up and running, and these measures announced today will provide an essential lifeline for many UK businesses."

It came as the Chancellor announced plans to support businesses bringing staff out of furlough through a new Jobs Retention Bonus Scheme.

Mr Sunak said the Government could pay up to £9 billion to businesses, as part of the programme which will see firms paid £1,000 per employee brought out of furlough, in a move which will particularly benefit the hospitality sector.

What was announced? 

The raft of wide-ranging measures includes: 

  • An 'Eat Out to Help Out' discount scheme or 'Dosh for Nosh' as some are describing it.
  • A £2 billion scheme of taxpayer-funded work placements for 16 to 24-year-olds on Universal Credit and at risk of long-term unemployment.
  • A £3 billion green package, with grants for home-owners and public buildings to improve energy efficiency.
  • A £111 million programme of unpaid traineeships combining work experience with training.
  • A VAT cut to encourage people to return to the hospital sector with VAT cut from 20% to 5% from next Wednesday until January 12. This will have an impact on eat-in or hot takeaway food from restaurants, cafes and pubs; accommodation in hotels, B&Bs, campsites and caravan sites, as well as attractions like cinemas, theme parks and zoos.
  • No stamp duty on homes under £500,000. It takes effect today until March 31st 2021.

What about the furlough scheme?

The Chancellor stuck firm to the October deadline for the job retention furlough scheme to end but said it would be replaced with a new Jobs Retention Bonus.

Explaining the new bonus scheme, Rishi Sunak said: “If you’re an employer and you bring back someone who was furloughed – and continuously employ them through to January – we’ll pay you a £1,000 bonus per employee.

“Its vital people aren’t just returning for the sake of it – they need to be doing decent work. So for businesses to get the bonus, the employee must be paid at least £520 on average, in each month from November to the end of January – the equivalent of the lower earnings limit in national insurance.”