The reduced VAT rate of 5% has been extended until 30 September 2021. Following this, an interim rate of 12.5% will be in place for a further six months with the standard rate of 20% returning in April 2022.
VAT registered business can check whether their VAT charges on supplies relating to hospitality, accommodation, or admission to certain attractions can be reduced.
If you supply food and non-alcoholic beverages on your premises, you’re currently required to charge the standard 20% VAT rate. These include for example restaurants, cafes and pubs. However, between 15 July 2020 and 31 March 2021 you will only need to charge 5%.
You can also 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 temporarily 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 are charging a fee for admission to certain attractions, you only need to charge the reduced rate of VAT between 15 July 2020 and 31 March 2021. This is where you are changing the standard rate of VAT.
However, if the fee you charge for admission is currently exempt, that will take precedence. Your supplies will also 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.
For the full details including the Flat Rate Scheme, The Tour Operators Margin Scheme, Retail Schemes and Accounting for supplies that straddle the temporary reduced rate see: VAT: reduced rate for hospitality, holiday accommodation and attractions – GOV.UK (www.gov.uk)