The government have announced they will be extending the temporary reduced rate of VAT for the Tourism and Hospitality sector which was due to end on 31stMarch 2021.
extend the temporary reduced rate of VAT of 5% until 30 September 2021
prepare for a new rate of 12.5% from 1 October 2021 to 31 March 2022
The government made an announcement back on the 8th 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
Hospitality
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 30th September 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.
More information about how these changes apply to your business can be found in Catering, takeaway food (VAT Notice 709/1).
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
More information about how these changes apply to your business can be found in Hotels and holiday accommodation (VAT Notice 709/3).
Admission to certain 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 30th September 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.
More information about how these changes apply to your business can be found in VAT: Admission charges to attractions.
The Flat Rate Scheme
If you are a small business and use the use the Flat Rate Scheme to simplify your VAT calculations you should be aware that certain percentages have been reduced in line with the introduction of the temporary reduced rate of VAT.
More information can be found in VAT Flat Rate Scheme.
If you have any questions regarding the scheme or need help with the set up of a payment plan, please get in touch with us at solutions@apexpb.co.uk
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