In the Chancellor’s summer statement on 8 July, he shared the government’s plans to change UK VAT from 20% to 5% for hospitality, holiday accommodation and attractions. This change came into effect from Wednesday 15 July 2020 and will run through until 12 January 2021.
To help businesses in the hospitality, holiday accommodation and attractions sectors, the reduced rate of VAT (5%) will apply to:
- Supplies of food and non-alcoholic drinks for consumption on premises from restaurants, pubs, bars, cafes and similar premises in the UK.
- Supplies of hot takeaway food and hot takeaway non-alcoholic drinks.
- Supplies of hotel and holiday accommodation and admission to certain attractions in the UK.
Full details can be found here HMRC Guidance.
If your business makes such supplies, it is important to check the relevant software to avoid overpaying VAT and there may be some simple changes you will need to make to affect the tax rate applied on or after 15 July 2020.
For more information, please see the links below regarding the accountancy software that relates to your business.