Hospitality Reduced Rate Extension - UPATE POST MARCH 2021 - FURTHER EXTENSION GRANTED
On 24 September, the government announced it will extend the temporary 15% VAT cut for the tourism and hospitality sectors to the end of March next year.
The government had announced that it would introduce a temporary 5% reduced rate of VAT for certain supplies of hospitality, hotel and holiday accommodation, and admissions to certain attractions in July and it is this VAT rate cut that has now been extended to 31 March 2021.
As a reminder the following supplies will benefit from this temporary 5% reduced rate of VAT:
- food and non-alcoholic beverages sold for on-premises consumption, for example, in restaurants, cafes and pubs
- hot takeaway food and hot takeaway non-alcoholic beverages
- sleeping accommodation in hotels or similar establishments, holiday accommodation, pitch fees for caravans and tents, and associated facilities
- admissions to the following attractions that are not already eligible for the cultural VAT exemption such as:
- theatres
- circuses
- fairs
- amusement parks
- concerts
- museums
- zoos
- cinemas
- exhibitions
- similar cultural events and facilities
Where admission to these attractions is covered by the existing cultural exemption, the exemption will take precedence.
As announced at budget 2021, the Government have extended the temporary reduced rate of VAT of 5% until 30 September 2021. Then from 1 October 2021 to 31 March 2022 a new rate of 12.5 will apply before it returns to the standard rate of 20% on 1 April 2022.