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Temporary VAT Reduction

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The Government has announced changes in the VAT treatment of certain supplies as a response to the effect of coronavirus on businesses.

This change focuses on those whose businesses have been adversely affected by forced closures and social distancing measures.

The changes come into effect from 15th July 2020 and apply to supplies made between 15th July 2020 and 12th January 2021.  


Who does it apply to? 

VAT registered businesses with supplies relating to:

-          Hospitality

-          Hotel and holiday accommodation

-          Admissions to certain attractions


VAT registered businesses that provide supplies in these areas can temporarily apply a reduced VAT rate of 5%.



Businesses who supply food and non-alcoholic beverages for consumption on the premises will be able to reduce the VAT rate from the standard rate of 20% to 5% on supplies made during the period 15th July 2020–21st January 2021.

The reduced VAT rate will also apply to supplies of hot takeaway food and hot takeaway non-alcoholic drinks.


Hotel and Holiday Accommodation

Businesses who provide the following will also benefit from the temporary reduced rate:

-          Sleeping accommodation in a hotel or similar

-          Certain supplies of holiday accommodation

-          Caravan pitches and facilities

-          Tent pitches and/or camping facilities


Admissions to Certain Attractions

Businesses charging a fee for admission where VAT would ordinarily be the standard rate will also qualify for the temporary reduced-rate VAT, however where these supplies are exempt this overrides the recent rules and they will not qualify for the reduced rate.

Some attractions that this may apply to include:

-          Shows and theatres

-          Amusement parks and fairs

-          Museums

-          Other cultural events and facilities.

For the full list please see the government guidance here.

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