Andrew Needham looks at the implications of the temporary 5% VAT rate for the hospitality industry.
Under current UK VAT law, the standard rate of VAT (20%) applies to all supplies of restaurant services, hot takeaway food, holiday accommodation and admission to many attractions.
Following the COVID-19 pandemic the hospitality industry has been very heavily economically impacted, so the government has introduced a stimulus package in the form of a temporary reduced rate of VAT of 5% covering the period 15 July 2020 to 12 January 2021. Its main objective is to support businesses severely affected by the coronavirus pandemic and social distancing measures.
The reduced rate will cover the following supplies:
The 5% reduced rate applies to supplies of:
- hot and cold food for consumption on the premises on