HMRC has issued an Order and new guidance to bring in the temporary reduced rate of VAT for various supplies made between 15 July 2020 and 12 January 2021 to support the hospitality sector, following the Chancellor’s announcement. The Value Added Tax (Reduced Rate) (Hospitality and Tourism) (Coronavirus) Order, SI 2020/728, will add three temporary new Groups to VATA 1994 Sch 7A to apply the 5% reduced rate to supplies of:
food and non-alcoholic beverages sold for on-premises consumption in restaurants, pubs and cafes (new Group 14);
hot takeaway food and hot takeaway non-alcoholic beverages (also new Group 14);
sleeping accommodation in hotels, holiday accommodation, pitch fees for caravans and tents, and associated facilities (new Group 15); and
admission fees charged to enter various attractions that are not already eligible for the cultural exemption (although the reduced rate will not cover admission to sporting events) (new Group 16).
The Order also updates the percentage rates for small businesses under the flat-rate scheme in the VAT Regulations, SI 1995/2518, reg 55K to reflect the temporary reduced rate.
HMRC’s Brief 10/2020: temporary reduced rate of VAT for hospitality, holiday accommodation and attractions outlines the scope of the changes and points businesses in the direction of the specialist sector guidance in a number of VAT Notices, all of which have been updated to reflect the changes. Businesses will need to have taken steps to amend accounting software, pricing and cash registers to account for VAT at the reduced rate by 15 July.
HMRC has issued an Order and new guidance to bring in the temporary reduced rate of VAT for various supplies made between 15 July 2020 and 12 January 2021 to support the hospitality sector, following the Chancellor’s announcement. The Value Added Tax (Reduced Rate) (Hospitality and Tourism) (Coronavirus) Order, SI 2020/728, will add three temporary new Groups to VATA 1994 Sch 7A to apply the 5% reduced rate to supplies of:
food and non-alcoholic beverages sold for on-premises consumption in restaurants, pubs and cafes (new Group 14);
hot takeaway food and hot takeaway non-alcoholic beverages (also new Group 14);
sleeping accommodation in hotels, holiday accommodation, pitch fees for caravans and tents, and associated facilities (new Group 15); and
admission fees charged to enter various attractions that are not already eligible for the cultural exemption (although the reduced rate will not cover admission to sporting events) (new Group 16).
The Order also updates the percentage rates for small businesses under the flat-rate scheme in the VAT Regulations, SI 1995/2518, reg 55K to reflect the temporary reduced rate.
HMRC’s Brief 10/2020: temporary reduced rate of VAT for hospitality, holiday accommodation and attractions outlines the scope of the changes and points businesses in the direction of the specialist sector guidance in a number of VAT Notices, all of which have been updated to reflect the changes. Businesses will need to have taken steps to amend accounting software, pricing and cash registers to account for VAT at the reduced rate by 15 July.
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