Blogs/Vlogs

Temporary cut to VAT on food, accommodation and attractions from 20% to 5%

08 July 2020

There was much speculation in the run up to today’s Summer Economic Update that the Chancellor Rishi Sunak would announce a temporary reduction in the rate of VAT. Whilst there was no blanket reduction, a temporary reduction to VAT from 20% to 5% has been announced for the hospitality sector. The reduced rate of VAT is the minimum allowed by the EU and will be welcomed.

Details are limited at present, but this what we do know:

  • Temporary VAT cut for food and non-alcoholic drinks. From 15 July 2020 to 12 January 2021, to support businesses and jobs in the hospitality sector, the reduced (5%) rate of VAT will apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises across the UK. Further guidance on the scope of this relief will be published by HMRC in the coming days
  • Temporary VAT cut for accommodation and attractions .From 15 July 2020 to 12 January 2021, to support businesses and jobs, the reduced (5%) rate of VAT will apply to supplies of accommodation and admission to attractions across the UK. Further guidance on the scope of this relief will be published by HMRC in the coming days.

We will provide further details on these announcements when these are published. If you are in the hospitality sector and would like to discuss the implications of the VAT reduction, please contact me or your usual UHY specialist.

A full summary of all announcements

We will  be issuing a complete summary of the Summer Economic Update tomorrow, which will offer a clear and concise commentary of the proposals, focusing on the issues pertinent to you, your family and your business.  Please visit our site again tomorrow to download the full summary

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