The Scottish Grocer’s Federation is seeking clarity around the VAT changes announced by the Chancellor of the Exchequer in his Summer Statement yesterday.

Rishi Sunak outlined that there would be a temporary VAT cut for food and non-alcoholic drinks from 20% to 5% which would run from 15 July 2020 to 12 January 2021.

This cut will also apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises across the UK.

The Chancellor also announced the introduction of a Job Retention Bonus which would involve a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021.

A 50% off dining scheme named ‘Eat Out to Help’ scheme was also announced in Parliament, with every diner entitled to adiscount of up to £10 per head on their meal, at any participating eatery.

Also a temporary Stamp Duty Land Tax (SDLT) cut in England and Northern Ireland, from £125,000 to £500,000 was confirmed.

SGF chief executive Dr Pete Cheema OBE said: “We would ask the UK government to clarify whether the VAT cut to food also applies to the food-to-go element offered by convenience stores.

“From our perspective we would hope that it does. The food-to-go offering provided in Scottish convenience stores is a growing and popular service enjoyed by customers.

“It is also an important source of revenue for retailers with 20% of stores now having a hot food counter or cabinet. In addition, we would also ask the Chancellor to consider extending the cut in VAT to the retail sector as a whole to kick-start the economy.

“In terms of the ‘Eat Out to Help Out’ scheme it should extended to include takeways and the convenience sector. Retailers will be at the very heart of the national recovery plan and it is vital that they are supported.

“Also, the Scottish Government will receive an additional £800million through the Barnett Formula. This is a great opportunity for the Scottish Government to align the Land and Buildings Transaction Tax (LBTT) with the Stamp Duty holiday cut for England and Northern Ireland.

“This would stimulate the Scottish convenience market and play an important role in the recovery plan by protecting and creating jobs in convenience retail. There are a lot of empty properties and such a move would incentive retailers to buy.”

The UK government’s Budget and Spending Review will take place in Autumn 2020.