The temporary reduction in the rate of VAT to 5% for the hospitality sector begins from today (15 July 2020) and will last until 12 January 2021.

The rate reduction announced in the Chancellor’s Summer Statement is one of the measures announced to support the hospitality sector.

HMRC’s guidance confirms the reduced rate will cover the following supplies: 

  • hospitality: hot and cold food and hot and cold non-alcoholic beverages sold for on-premises consumption – for example, in restaurants, cafés and pubs – and hot takeaway food and hot non-alcoholic beverages sold for consumption off the premises. It does not include alcoholic beverages of any kind
  • accommodation: sleeping accommodation provided in a hotel or similar establishment, holiday home accommodation, pitch fees for caravans and tents and supplies of associated facilities
  • attractions: admission to shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions and similar cultural events and facilities provided that these are not included within the existing cultural exemption

The VAT rules are notoriously a complex area so please contact us and we will help guide you through the changes.