Hospitality VAT - a reminder of the reduced rates

Reduced VAT rate for hospitality

The 5% reduced rate on hospitality has been extended to 30 September 2021 and the from 1 October 2021 to 31 March 2022 this rises to 12.5%, before going back to the normal 20% from 1 April 2022.

For restaurants and cafes ‘Food and drink’ includes all food consumed on premises, and all non-alcoholic drinks

For takeaway food it only applies to hot food, and non-alcoholic drinks.

Alcoholic drinks are still subject to 20% VAT.

For accommodation virtually all hotel / holiday let accommodation is subject to the reduced rates noted above.

The link for the reduced rate guidance is here https://www.gov.uk/guidance/vat-reduced-rate-for-hospitality-holiday-accommodation-and-attractions

For admissions to attractions, where usually 20% VAT applies, this also falls under the VAT reduced rate scheme.

A link to what is classed as ‘an attraction’ is on this link https://www.gov.uk/guidance/vat-on-admission-charges-to-attractions

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