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The temporary VAT rate of 5% for the tourism and hospitality markets that has been in place since last summer will end on 30 September 2021 and a new rate of 12.5% will come into effect on 1 October.

In a bid to reduce the impact of the pandemic on the hard-hit hospitality, hotel and attractions sectors, a reduced VAT rate of 5% was introduced on 15 July 2020. To further assist severely affected businesses, this rate was extended until 31 March this year and then a further extension, to 30 September was put in place.

The supplies that will benefit from this on-going reduction are:

  • food and non-alcoholic beverages sold for on-premises consumption, e.g., 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 following attractions that are not already eligible for the cultural VAT exemption such as:
    •  theatres
    • circuses
    • fairs
    • amusement parks
    • concerts
    • museums
    • zoos
    • cinemas
    • exhibitions
    • similar cultural events and facilities

The VAT rate will return to the normal level of 20% on 1 April 2022.

Further information issues relating to the temporary reduced rate can be found here

About the Author

Paul Newbold Image

Paul Newbold

After qualifying with KPMG where he gained significant audit experience, Paul joined Torgersens in 1991 and became the firm’s audit partner in 2000. Paul employs his broad range of financial skills to provide commercial and accounting advice to a range of owner-managed businesses in the independent retail, education and professional services sectors. He also has extensive experience dealing with charities, Registered Social Landlords and not-for-profit organisations and co-operatives.   Outside of work, Paul likes to visit Eastern France and South-West German and read novels by David Morrell, Michael Blake and Harper Lee. He also likes watching films, his favourite is The Shawshank Redemption.

To get in touch please e-mail

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