Categories
Uncategorized

VAT rate cut for hospitality

VAT rate reduction for hospitality

VAT rate reduction

Introduction

The government announced that it would introduce a temporary 5% reduced rate of VAT for certain supplies of hospitality, hotel and holiday accommodation, and admissions to certain attractions.

This reduction in the VAT rate from the standard rate of 20% will have effect from 15 July 2020 to 12 January 2021.

These changes are being brought in as a response to the pandemic to support businesses adversely impacted by non-essential business closures and social distancing measures.

Included supplies

As detailed in HMRC guidance, the following supplies will benefit from the temporary 5% reduced rate of VAT:

  • food and non-alcoholic beverages sold for on-premises consumption, for example, in restaurants, cafes and pubs
  • hot takeaway food and hot takeaway non-alcoholic beverages
  • sleeping accommodation in hotels or similar establishments, holiday accommodation, pitch fees for caravans and tents, and associated facilities
  • admissions to the following attractions that are not already eligible for the cultural VAT exemption such as:
    • theatres
    • circuses
    • fairs
    • amusement parks
    • concerts
    • museums
    • zoos
    • cinemas
    • exhibitions
    • similar cultural events and facilities

For full guidance please refer to the link below:

https://www.gov.uk/government/publications/revenue-and-customs-brief-10-2020-temporary-reduced-rate-of-vat-for-hospitality-holiday-accommodation-and-attractions/guidance-on-the-temporary-reduced-rate-of-vat-for-hospitality-holiday-accommodation-and-attractions#:~:text=On%208%20July%202020%2C%20the,2020%20to%2012%20January%202021.