The 5% VAT Rate Cut For Hospitality Businesses

After Chancellor Rishi Sunak's Summer Statement, HMRC issued new guidance on the temporary 5% VAT rate cut for the hospitality sector. This includes holiday accommodation and attractions too ...

It is very welcome news for any hospitality business that was deeply affected by the recent Coronavirus lockdown. Many are still suffering with the very slowly relaxing guidelines the Government announced, so a 5% VAT rate cut will help.

The 5% reduced rate of VAT applies to:

- food and non-alcoholic beverages for on-premises consumption or for takeaway
- hot takeaway non-alcoholic beverages
- sleeping accommodation in hotels or similar establishments
- holiday accommodation
- pitch fees for caravans and tents, and associated facilities

The 5% VAT rate cut also applies to admissions to the following:

- theatres
- circuses
- fairs
- amusement parks
- concerts
- museums
- zoos
- cinemas
- exhibitions
- cultural events

Where admission to these attractions is covered by the existing cultural exemption, the cultural exemption will always take precedence.

VAT rules for the hospitality sector are already complicated with a number of different VAT regimes available. HMRC has updated much of its guidance to offer more detailed information on the application of the 5% VAT rate cut.

Making changes at short notice can be difficult for any business so Essendon Accounts & Tax are always here to help.

If you feel inspired to find out more about anything I've said here, do call me on 01908 774320 or leave a comment below and I'll be in touch as soon as I can.