VAT reduction for UK hospitality, holiday accommodation and visitor attractions
As further establishments begin to open their doors again, the Government are continuing to provide financial support to get UK businesses back up and running, while also encouraging the public to leave their homes and get back to some form of normality.
The Government announced a temporary VAT reduction for hospitality, holiday accommodation and visitor attractions – reducing VAT from 20% to 5%, with effect from 15 July 2020 until 12 January 2021.
The reduced VAT rate for hospitality will apply to the supply of food and non-alcoholic beverages for consumption on your premises only.
For takeaway services the reduced VAT rate will on be on supplies of hot food and hot non-alcoholic drinks.
Further guidance on hospitality VAT reductions can be found here.
Hotel and holiday accommodation
The following businesses will benefit from the reduced VAT rate:
- Supply of over-night accommodation in a hotel or similar establishment,
- Make certain supplies of holiday accommodation,
- Charge fees for caravan pitches and associated facilities, and
- Charge fees for tent pitches or camping facilities.
Further guidance on holiday and hotel accommodation VAT Reductions can be found here.
Admission to attractions
Admission fees for certain UK visitor attractions where the supply is currently standard rated will be able to charge the reduced VAT rate.
If the fee is currently exempt then this will take precedence and the supply will continue to be exempt.
Further guidance can be found here
Businesses can choose to either reduce their current prices to reflect the reduced VAT rate or they can continue charging the same price, creating a greater margin and contributing towards a quicker recovery from the coronavirus pandemic.