16 July 2020

There will be a temporary VAT reduction for the tourist and hospitality industry from 15 July 2020 to 12 January 2021. This blog will provide guidance to the introduction of the 5% reduced rates and outline who it applies to.

Who this applies to:

  • Hotels and other establishments providing overnight accommodation
  • Pubs, restaurants and cafes
  • Tourist attractions

Overnight accommodation: hotels, inns and similar establishments, campsites and caravan parks.

If you are currently suppling the following services at a rate of 20% VAT, you will be able to benefit from the reduced rate of 5% as of 15 July 2020:

  • sleeping accommodation, including bathrooms, living rooms and suites
  • accommodation used for the supply of catering
  • rooms provided with sleeping accommodation

If a deposit was taken before 15 July 2020, for a stay that falls within the time period of the reduced rate, the supplier can choose to only charge 5% on the deposit.

VAT Notice 709/3 Hotels and holiday accommodation has been revised with update, please follow the link for more information.

Food and drink for pubs, cafes and restaurants: supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises across the UK for on-premises consumption. This also effects hot takeaway food and hot takeaway non-alcoholic beverages.

If you supply non-alcoholic beverages and food on your premises such as a café or restaurant and currently charge 20% VAT on these supplies, you are now only required to charge 5% VAT. You will also be able to charge the reduced rate on supplies of hot takeaway food and hot takeaway non-alcoholic drinks.

Both VAT Notice 709/1 Catering, takeaway food and VAT Notice 701/14 Food products; have been updated to reflect the reduction, please follow the links for more information.

Admission to certain attractions: if you currently charge 20% VAT on administration fees for the following attraction, the 5% reduction now applies:

  • Shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions, similar cultural events and facilities

This temporary reduced rate does not apply to administrations fees for sporting events.

Where goods are part of the admission fee and are incidental to the main supply, the whole supply is eligible for the temporary reduced rate.

VAT on admission charges to attractions has been updated to reflect the changes, please follow the link for more information.

If you have any further queries, please contact us.