Hospitality Industry Welcomes Reduced VAT Rate

Hospitality Industry Welcomes Reduced VAT Rate

The government made an announcement on 8 July 2020 allowing VAT registered businesses to apply a temporary 5% reduced rate of VAT to certain supplies relating to:

  • hospitality
  • hotel and holiday accommodation
  • admissions to certain attractions

The temporary reduced rate will apply to supplies that are made between 15 July 2020 and 12 January 2021.




If you supply food and non-alcoholic beverages for consumption on your premises, for example, a restaurant, café or pub, you’re currently required to charge VAT at the standard rate of 20%. However, when you make these supplies between 15 July 2020 and 12 January 2021 you will only need to charge 5%.

You will also be able to charge the reduced rate of VAT on your supplies of hot takeaway food and hot takeaway non-alcoholic drinks.

Hotel and holiday accommodation


You will also benefit from the temporary reduced rate if you:

  • supply sleeping accommodation in a hotel or similar establishment
  • make certain supplies of holiday accommodation
  • charge fees for caravan pitches and associated facilities
  • charge fees for tent pitches or camping facilities

VAT on admission charges to attractions


If you charge a fee for admission to certain attractions where the supplies are currently standard rated, you will only need to charge the reduced rate of VAT between 15 July 2020 and 12 January 2021.

However, if the fee you charge for admission is currently exempt that will take precedence and your supplies will not qualify for the reduced rate.

This applies to:

  • shows
  • theatres
  • circuses
  • fairs
  • amusement parks
  • concerts
  • museums
  • zoos
  • cinemas
  • exhibitions
  • similar cultural events and facilities

Examples of where the reduced rate may apply could be attractions such as:

  • a planetarium
  • botanical gardens
  • studio tours
  • factory tours

Got questions? Email or call 03330 166559. Our experts are waiting to help you out.

Agreeing a VAT Time To Pay Proposal

Agreeing a VAT Time To Pay Proposal

If you can’t pay your VAT on time or in full, you should contact HMRC’s Payment Support Service on 0300 200 3835 immediately to make them aware of the situation.

By contacting HMRC, you may be able to avoid late payment penalties, which will only make your financial situation worse, and be able to arrange a payment plan that gives you:

  • More time to pay
  • Allows you to pay your bill in instalments by direct debit.

What is a Time to Pay Agreement?

If your company can’t pay VAT, you should contact HMRC to ask for a ‘Time to Pay Arrangement’ (TTP).

HMRC provides a ‘Business Payment Support Service’ that businesses can use if they are struggling to make a payment.

SMEs that are experiencing cash flow problems but which have a good compliance record should be able to make a Time to Pay arrangement with HMRC to pay their VAT bill over a longer term and in instalments.   

Why is the Business Unable to pay VAT?

Being unable or late to pay your VAT is a serious issue and HMRC will understandably want to know why this problem has occurred. One of the of the most important things HMRC will want to know is whether the business is genuinely unable to pay its VAT bill or if the company directors are simply unwilling to make the payment.

It is not uncommon for directors to have invested their working capital in growing the business rather than paying their tax liabilities, and in this case, it will be difficult to reach a Time to Pay arrangement.   

What are the Criteria for an HMRC Time to Pay Arrangement for VAT?

When discussing your circumstances with HMRC, the Business Payments Unit will want to know:

  • Why the company is unable to pay its VAT in full and on time
  • Whether you filed your VAT return on time
  • What you have done to try and raise the money to pay the debt
  • How much you can pay immediately
  • How long you think you will need to pay the rest

Depending on the reasons why the company can’t pay, what your payment history has been and how long you need to pay the bill, HMRC will assess your ability to make the future payments and decide whether to agree to a VAT payment plan.

Deciding how much you can Afford to pay in Instalments

It’s essential you are realistic about how much of your VAT bill you will be able to repay each month. If you are unable to keep to the arrangement then the payment plan could be cancelled and penalties could apply. It will also be much more difficult to arrange another VAT payment plan if you have already defaulted on one. However, you also need to offer to repay an amount HMRC considers to be reasonable enough or it may refuse your proposal.

Got questions? Email or call 03330 166559. Our experts are waiting to help you out.

Handling Annual Leave on Lockdown

Handling Annual Leave on Lockdown

As the lockdown continues to rumble on, and with no clear indication of when it is likely to end, businesses should be considering getting their employees to take some of their holiday entitlement in order to avoid a different crisis when normal business resumes. 

Picture the scene: lockdown is lifted, business picks up and you’ve got loads of back order as well as current work to get out the door. Then one of your key team members sticks in a holiday request, then another, then another. Suddenly you’re faced with the prospect of trying to operate above normal 100% capacity with 70% of your team, or you have to deny holiday requests. If neither of these scenarios are appealing then you need to consider having your employees take some holiday leave when they are furloughed.

It’s good employer practice to encourage employees to take their annual leave spread throughout the year, but it’s good business practice to ensure that most leave is taken at a time when it’s best for the business. Many businesses are seasonal, or at least operate cyclically, and leave should be given/taken accordingly. If you’re a holiday park operator busy in the summer, you’d obviously seek to avoid too many holidays in the summer. Equally, if you’re a retailer you’d probably want to avid a glut of holidays in December.

How does lockdown fit in?

Most private sectors businesses have been forced to close, or at least drastically reduce their operating capacity. It’s fair to say therefore that these businesses could be said to be in a quiet phase of the cycle, and that when lockdown is eased or lifted, they will then, very quickly enter into the busy phase of the cycle. Therefore, if you apply the principle above, you should be looking to have as many holidays taken now, when there is going to be little or no impact on the business. 

It may be tempting to insist all leave is taken now, during lockdown/furlough, but this is a risky approach and could have a seriously detrimental effect on team morale. We are therefore encouraging our clients to take a collaborative approach with their teams and a good mix could be asking them (or compelling them to take some of their annual leave now) along with an undertaking from them not to ask for time off for a period of time after lockdown restrictions have been eased. Remember as an employer, there is no obligation on an employer to agree to holiday requests and it’s reasonable to refuse these where there are business needs to be met. If employees are unable to take all their holiday as a result, then they may be able to carry this over to the next holiday year.

Remember the notice periods

It’s important to remember that, if you wish to compel employees to take holiday leave at a set time that you must give them notice equivalent to twice the length of time of leave you are asking them to take. So, if you want them to take two weeks, you need to give four weeks’ notice. It’s very important that you consider the timing of this in relation to your anticipated re-opening. For example, if you anticipate needing all hands on deck within four weeks, then the maximum amount of holiday you can compel your staff to take is 1.33 weeks as you’ll need to give them 2.66 weeks’ notice.

Got questions? Email or call 03330 166559. Our experts are waiting to help you out.

Bounce Back Loan Scheme – More Government Support for business affected by COVID-19

Bounce Back Loan Scheme – More Government Support for business affected by COVID-19

In a welcome boost, small businesses owners can get from £2,000 to £50,000 “within days” from the Government’s brand new Bounce Back Loans scheme.

On 27 April 2020, Chancellor Rishi Sunak announced the new scheme, adding to the existing support for small businesses affected by coronavirus.

The Government is giving accredited lenders a 100% guarantee for the loans, and aiming to deliver loans through this scheme as quickly as possible.

What’s available?

You can borrow between £2,000 and £50,000, with a cap of 25% of your annual turnover.

The Chancellor stated you can get the cash “within days” but the scheme won’t open until Monday 4 May 2020.

Are you eligible?

You can apply for a loan if your business:

  • is based in the UK
  • has been negatively affected by coronavirus
  • was not an ‘undertaking in difficulty’ on 31 December 2019

PSC contractors will be eligible, as will most one-man limited companies. We know you’ve been left behind by the Government’s COVID-19 support measures so far, and this is your opportunity to access some much needed funds to ensure your business survival beyond the lockdown.

Are the loans interest-free?

No, but for the first 12 months, you won’t pay any interest and you won’t have to make any repayments.

You won’t pay an arrangement fee or early repayment charges – the Government will cover any fees as well as your interest for the first 12 months.

The Government is negotiating with lenders to make sure that for the rest of the term of the loans, borrowers pay a low standardised rate of interest.

How do you apply for a Bounce Back Loan?

The scheme will open for applications on Monday 4 May 2020. To apply, you’ll fill in a short online form.

Where can you get a Bounce Back Loan?

The scheme will be available through a network of accredited lenders and, as with CBILS, we are recommending the first port of call should perhaps be your existing business bank.

What can you use the loan for?

As far as we can see, so far there is no restriction on the use of the loan, and we see it as being sensible to use this as a contingency fund. Remember that there are no charges, interest or repayments required in the first year. 

If your business is in financial difficulties at the moment, then having access to the funds may be the lifeline you need until the crisis is over and your business is back earning.

Alternatively, if your business is not yet feeling the effects of lockdown, is not yet in financial distress, but it could be in the next few months, then having up to 25% of your turnover sitting in the bank could provide you with the buffer you need to keep going. If you don’t need it, don’t use it, and pay it back before the interest charging period starts.

How can Acumenica help?

Until more details are released, we don’t really know how much of the process we can help with. We do know that we calculate how much you’ll be eligible for and how much you might need (your cash runway) which is an essential part of any application. We’re told that the application process should be simple but we have our doubts about we’ll beagle to help in the process too.

Join the conversation

How is the Coronavirus affecting your business? We ‘d love to hear from you. Please join our Facebook group to share your experiences, and get some help from your peers and our experts.

If you’d like to be kept informed about the Bounce Bank loans and how Acumenica can help you, please email with the subject line: Bounce Back Business Loans and we’ll get back to you.

We’ll help you through this

Get ready for (re)opening day

Get ready for (re)opening day

These are worrying times for all businesses and salons are feeling it as bad, if not worse, than anyone else. With salons being forced to close their doors for a good few weeks yet, there is zero income coming in. Time to start thinking creatively.

Generate cash before lockdown is lifted

You can generate cash on every booking made, not just appointments you’ve completed, by using online deposits. Businesses that take deposits or require prepayment for their services when they reopen are going to be in a much better position to survive the post-COVID restrictions than the businesses that aren’t. 

Leverage that client relationship

Hairdressers have a special relationship with their clients and I believe that this can be capitalised on. That sounds a bit mercenary, I know, but I don;t mean it to. What I mean is that your clients will want to help you, and you should give them that opportunity. If clients realise that paying a deposit a couple of weeks or even a month in advance will help ensure your business survival, I feel sure that thy will happily do so.

Have you seen the state of some people’s hair?

Demand for your services will be through the roof once lockdown is over, so don’t worry about people paying in advance. If you can give them the competitive edge by offering priority booking for those paying a deposit or better, full payment, then you’ll be filling up those columns in no time.  The first thing most people will be doing is booking appointments for their much needed services, and they’ll be happy to pay a deposit to secure their booking. 

Bearing in mind that there are certainly going to be social distancing restrictions in place in your salon after lockdown, not having to wait around to pay after the appointment will definitely be a good idea. This would potentially allow you to take full payment in advance. And nobody wants to handle cash that’s been handed around goodness knows how many people, anyway.

Navigating client roadblocks

During my research for this article, two concerns kept popping up, and both are very valid: The first is “What if the salon goes bust? What will happen to the money I paid you?” This is a big concern, and remember that your clients might not exactly be rolling in the green at the moment either so will be naturally cautious. You need to get out in front of this and assure the clients that (a) your business is financially stable and that the support that the government has given you has ensured that you’ll be able to weather the storm. And of course, as payment is being made online by credit card, the payment is completely protected under section 75 of the Consumer Credit Act.

The other concern is “How can we book an appointment if we don’t know when lockdown will be eased?” It’s true that we don’t know exactly when lockdown restrictions applicable to salons will be lifted but we can make a decent guess. My feeling is that it’ll be either 18th or 25th May or maybe 1st June. If you’re out by a week then you just need to move the calendar up or down a week. And obviously assure your clients that if the appointment isn’t able to take place for X months, then a full refund will be given. 

Sweeten the deal

If there’s still resistance, you can always use the tried and tested discount or something for nothing routes. Maybe offer a 20% discount if payment in full is made in advance or give a free product up to a certain value with every online booking.

I appreciate that this goes against my normal recommendation of having faith in the value of your service and therefore do not offer discounts. But we are in a New Normal right now and all bets are off. This is about survival, not profit. And to survive, you might just need cash now rather than profit later.

Great plan. How do we do it?

For this to work you need two things: an online booking system and online payment capabilities. There are loads of online booking systems available but the salon specific one we like is which is available from £15 per month, per user. You can load up your appointment types, stylists, time estimates etc, and most importantly, cost. And obviously, you want to enable client log-in so that they can book their appointment without you needing to get involved.

Once you have this in place, you can then link it to your existing payment gateway or, if you don’t have one, set up a new online system. Again, there are loads of options on the market, but we like Stripe as a pretty solid all-rounder.

Communicating to your clients

Once you’ve got everything in place, you need to get the word out. You should have email addresses or mobile numbers for all of your clients, so a well worded message can let clients know when your business will reopen and include your online booking link so clients can book ahead for when you’re back up and running.

A well-timed social media campaign is also extremely important. Now, more than ever, people are using Instagram and Facebook to get their information. A strong social media presence is essential for any forward thinking salon. Encourage your clients to share your pages as well so that as many people can see what your plans are.

completed, by using online deposits. Businesses that take deposits or require prepayment for their services when they reopen are going to be in a much better position to survive the post-COVID restrictions than the businesses that aren’t. 

Worried that clients won’t book and pay in advance? Demand for your services will be through the roof once lockdown is over! The first thing most people will be doing is booking appointments for their much needed services, and they’ll be happy to pay a deposit to secure their booking. In fact, clients love the experience, because at the end of their appointment they can leave without having to wait around to pay – it’s like Uber for your salon!

With high demand and smart communication of policies to reassure clients that their deposits can be shifted to a new booking and even refunded if the appointment can’t go ahead within X months, your calendar and your bank account will be full. 

The Coronavirus Business Interruption Loan Scheme

The Coronavirus Business Interruption Loan Scheme

If your business is struggling financially, you may be able to access bank funding through the CBILS scheme. The Coronavirus Business Interruption Loan Scheme (CBILS) provides financial support to smaller businesses (SMEs) across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak.

The scheme is a part of a wider package of government support for UK businesses and employees but remember, the finance available under the CBILS scheme is provided on a commercial basis by banks and other lenders, on normal commercial lending terms. These are loans (or overdrafts), not grants, and there will be interest and fees charged, and the loans will need to be repaid.

CBILS has been significantly expanded along with changes to the scheme’s features and eligibility criteria. The changes mean even more smaller businesses across the UK impacted by the coronavirus crisis can access the funding they need.

Importantly, access to the scheme has been opened up to those smaller businesses who would have previously met the requirements for a commercial facility but would not have been eligible for CBILS. Insufficient security is no longer a condition to access the scheme.

This significantly increases the number of businesses eligible for the scheme. The expanded scheme will be operational with lenders from Monday 6 April 2020.

How it works

British Business Bank operates CBILS via its accredited lenders. There are over 40 of these lenders currently working to provide finance. They include:

  • high-street banks
  • challenger banks
  • asset-based lenders
  • smaller specialist local lenders

A lender can provide up to £5 million in the form of:

  • term loans
  • overdrafts
  • invoice finance
  • asset finance

CBILS gives the lender a government-backed guarantee for the loan repayments to encourage more lending.

The borrower remains fully liable for the debt.

Under the scheme, personal guarantees of any form will not be taken for facilities below £250,000.

For facilities above £250,000, personal guarantees may still be required, at a lender’s discretion, but:

recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied;

a Principal Private Residence (PPR) cannot be taken as security to support a personal guarantee or as security for a CBILS-backed facility

How to apply

Find a lender 

The first port of call should probably be your current business banker as they will know your business better and are likely to make a decision quicker than a cod contact.

You should approach the lender yourself, ideally via the lender’s website.

Notes: There is high demand for CBILS facilities. Phone lines are likely to be busy and branches may not be able to handle enquiries in person.

Not every accredited lender can provide every type of finance available under CBILS, and the amount of finance offered varies between lenders. Please see the lenders’ websites for more information on the amounts they are able to offer.

The lender makes a decision

The lender has the authority to decide whether to offer you finance.

Under the scheme, lenders will not take personal guarantees of any form for facilities below £250,000.

For facilities above £250,000, personal guarantees may still be required, at a lender’s discretion, but:

  • they exclude the Principal Private Residence (PPR), and
  • recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied

 If the lender turns your application down

If one lender turns you down, you can still approach other lenders within the scheme.

Access to the scheme has now been opened up to smaller businesses facing cashflow difficulties who previously would not have been eligible for CBILS because they met the requirements for a standard commercial facility.

You may therefore consider re-contacting your lender if you have previously been unsuccessful in securing funding.

Who is eligible?

Your business must:

  • Be UK-based in its business activity
  • Have an annual turnover of no more than £45 million
  • Have a borrowing proposal which the lender would consider viable, were it not for the current pandemic
  • Self-certify that it has been adversely impacted by the coronavirus (COVID-19).

Lenders will need further information to confirm eligibility. All lending decisions remain fully delegated to the 40+ accredited lenders.

Businesses from any sector can apply, except the following:

  • Banks, insurers and reinsurers (but not insurance brokers)
  • Public-sector bodies
  • Further-education establishments, if they are grant-funded
  • State-funded primary and secondary schools

What lenders will need from you

When you apply for a business loan, most lenders will ask you for the following:

Details of the loan

  • The amount you would like to borrow
  • What the money is for — the lender will check that it’s a suitable business purpose and the right type of finance for your needs
  • The period over which you will make the repayments — the lender will assess whether the loan is affordable for you

Supporting documents

You will need to provide certain evidence to show that you can afford to repay the loan. This is likely to include:

  • Management accounts
  • Cash flow forecast
  • Business plan
  • Historic accounts
  • Details of assets

The above requirements will vary from lender to lender. If you do not have everything listed here, a CBILS loan could still be an option to provide finance to support your business.

Note: For many customers approaching their existing lenders for a smaller facility, the process may be automated and therefore may not require the same level of documentation.

How can Acumenica Group help?

Acumenica are committed to helping their clients and the wider business community navigate their way through these difficult and unprecedented times. If you need help with your CBILS application, pease email or call us on 03330 166559. We ask that you remember that we expect to be extremely busy with this, so priority will be given to businesses who have been worse affected by the outbreak such as businesses operating in the hospitality, tourism and leisure industries.