VAT relief rises to 12.5% from 1st October.

24 Sep

On 8th July 2020, the government announced a temporary 5% reduced rate of VAT to certain supplies relating to hospitality, hotel and holiday accommodation and admission to certain attractions.

The reduced rate was initially introduced to last for a temporary period between 15th July 2020 and 12th January 2021. This period was subsequently extended to 31st March 2021, and then extended to 30th September 2021.

From 30th September a new reduced rate of 12.5% will then be introduced which will end on 31st March 2022. The scope of the relief will not change:

Scope of relief

  • Hospitality – food and non-alcoholic beverages consumed on the premises, hot takeaway food and hot takeaway non-alcoholic drinks
  • Accommodation — hotels and similar establishments, caravan pitches, tent pitches, holiday cottages and similar
  • Attractions – cinemas, theatres, amusement parks, zoos, exhibitions and other similar attractions.

Invoices raised before the end of September will be subject to the 5% rate, even if it relates to a booking in October or later, this will be particulalry important for hoteliers.

Law correct at the date of publication.
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