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Reduced VAT on Hospitality

Reduced VAT on Hospitality

What is it?  

The 5% reduced rate on most tourism and hospitality-related activities (originally introduced by the Government  with effect from 15 July 2020) will be coming to end on 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? 

Those business that had temporarily reduced the rate of VAT on their supplies, will need to apply the higher rate of 12.5% when calculating their Output VAT with effect from 1 October 2021.

Those using the Flat Rate Scheme should check the HMRC website click here as some of the rates will have been revised 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 22 September 2021

22 September 2021
Those business that had temporarily reduced the rate of VAT on their supplies, will need to apply the higher rate of 12.5% when calculating their Output VAT with effect from 1 October 2021

17 August 2021
The 5% reduced rate on most tourism and hospitality-related activities (originally introduced by the Government  with effect from 15 July 2020) will be coming to end on 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.

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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