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Reduced rate of VAT for hospitality, holiday accommodation and attractions is increasing to 12.5%


Reduced rate of VAT for hospitality, holiday accommodation and attractions is increasing to 12.5% from 1 October 2021


The current 5% rate was introduced in July 2020 to help businesses trade through the COVID-19 pandemic. Although the 5% rate ends on 30 September 2021, this will be replaced a rate of 12.5% which will apply between 1 October 2021 and 31 March 2022 at which time it is due to revert to the standard rate of 20%.


The reduced rate applies to :

  • 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 attractions that are not already eligible for the cultural VAT exemption for example theatres, amusement parks, cinemas, zoos, etc.

HM Revenue & Customs’ guidance can be found on GOV.uk.

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