As part of the COVID-19 support for the hospitality and leisure industries, VAT on some sales was reduced to 5% for a limited period, starting from 15th July 2020.
This reduced rate was originally scheduled to end on 12th January 2021, however it has since been extended and updated numerous times, as the COVID-19 pandemic continues on.
The situation as of May 2021, is that the temporary 5% rate of VAT is now extended until 30th Sept 2021. A new reduced rate of 12.5% will apply from 1st October 2021 until 31st March 2022, after which everything will return to the standard 20% rate.
It is important to understand which sales are eligible to benefit from the reduced rate, as some supplies such as alcoholic beverages, are still chargeable at 20%.
The supplies below currently benefit from the reduction:
- Admission to cultural attractions that do not already benefit from the cultural VAT exemption, such as theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions and other similar cultural events and facilities.
- Food and non-alcoholic beverages sold in restaurants, cafes and pubs. These must be consumed on site.
- Sleeping accommodation in hotels or similar establishments, holiday accommodation, pitch fees for caravans and tents, and associated facilities.
- Hot takeaway food and hot takeaway non-alcoholic beverages.