Covid 19 - What you need to know - HMRC guidance on VAT reduction.
The Government has now published guidance, to help VAT registered businesses understand how the temporary reduction will be applied.
The Government made an announcement on 8 July 2020 allowing VAT registered businesses to apply a temporary 5% reduced rate of VAT to certain supplies relating to:
- hotel and holiday accommodation
- admissions to certain attractions
The temporary reduced rate will apply to supplies that are made between 15th July 2020 and 12th January 2021.
If you supply food and non-alcoholic beverages for consumption on your premises, for example, a restaurant, café or pub, you will also be able to apply the lower rate of VAT as well as on supplies of hot takeaway food and hot takeaway non-alcoholic drinks.
More information about how these changes can be found in Catering, takeaway food (VAT Notice 709/1).