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Reduced VAT on hospitality supplies – for now

Temporary VAT relief for certain supplies relating to hospitality, holiday accommodation and admission to certain types of attractions has been introduced by the Value Added Tax (Reduced Rate) (Hospitality and Tourism) (Coronavirus) Order 2020. The relief is in the form of a reduced rate of 5% for all relevant supplies for a temporary period starting on 15 July 2020 and ending on 12 January 2021. The Order applies to the whole of the UK

This temporary relief is being introduced to support employment and the reopening of businesses in the hospitality, accommodation and tourism sectors which, for the period that it is in place, will only be required to charge and account for VAT at the reduced rate on the specified supplies.

For the hospitality sector, the relief will cover all supplies made of hot and cold food and hot and cold non-alcoholic beverages consumed on premises in restaurants, cafes, pubs and similar establishments. It will also cover supplies of hot takeaway food and hot takeaway non-alcoholic beverages for consumption off the premises. Supplies of cold takeaway food and cold takeaway beverages for consumption off the premises remain subject to the current rules.

For the accommodation sector, the relief applies to the provision of sleeping accommodation in hotels and similar establishments, the grant of a licence to occupy holiday accommodation, as well as pitch fees for caravan parks and tents and associated facilities.

The relief also covers admission to shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions, and similar cultural events and facilities.

Photo by Dan Gold on Unsplash

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