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Reduced VAT on Hospitality

Reduced VAT on Hospitality

What is it?  

The Government cut the rate of VAT applied on most tourism and hospitality-related activities from 20% to 5% for six months, from 15 July 2020 until 31 March 2021 (extended from 12 January 2021).

This has now been further extended until 30 September 2021

Thereafter the rate will be increased to 12.5% for the six month period from 1 October 2021 to 31 March 2022.

Who is it for? 

VAT registered businesses supplying

  • food and non-alcoholic beverages for consumption on their premises
  • hot takeaway food and hot takeaway non-alcoholic drinks
  • sleeping accommodation in a hotel or similar establishment
  • certain supplies of holiday accommodation
  • caravan/tent/camping pitches and associated facilities
  • admission to certain attractions  

How does it work? 

These changes will automatically apply to eligible tourism and hospitality-related activities.

What should I do next? 

Businesses should check whether they can temporarily reduce the rate of VAT on their supplies, and apply that rate when calculating their Output VAT

Those using the Flat Rate Scheme should check the HMRC website click here as some of the rates have been reduced to reflect these changes

Similarly those using the Tour Operators Margin Scheme should check the HMRC website click here as these changes may impact the mechanics of their calculations

Critchleys Clients: If you have specific questions, please contact your Critchleys Accountant directly. 

 


 

First Published 9 July 2020
Last Updated 4 March 2021

4 March 2021
This has now been further extended until 30 September 2021

Thereafter the rate will be increased to 12.5% for the six month period from 1 October 2021 to 31 March 2022.

24 September 2020
The Government will cut the rate of VAT applied on most tourism and hospitality-related activities from 20% to 5% for six months, from 15 July 2020 until 31 March 2021 (extended from 12 January 2021). 

9 July 2020
First published

Find out more about Josie Trainor

Josie  Trainor

Josie Trainor

Josie is the Head of Outsourcing.

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