Following the Chancellor’s summer statement on 8 July, guidance has been released on the temporary changes to VAT.
This guidance confirms that the reduced rate of 5% will take effect for the following supplies made between 15 July 2020 and 12 January 2021:
- food and non-alcoholic beverages sold for on-premises consumption, for example, in restaurants, cafes and pubs;
- hot takeaway food and hot takeaway non-alcoholic beverages;
- sleeping accommodation in hotels or similar establishments, holiday accommodation, pitch fees for caravans and tents, and associated facilities; and
- admission to attractions such as theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions and similar cultural events and facilities – but where the cultural exemption applies (to the supply by a public body or an 'eligible body' of a right of admission to a museum, gallery, art exhibition or zoo, or a theatrical, musical or choreographic performance of a cultural nature) then this will take precedence. The temporary reduced rate does not apply to admission to sporting events.
This temporary reduced rate only applies to admission fees, however, 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.
For those business that use the flat rate scheme (FRS), certain percentages have been reduced in line with this temporary VAT rate reduction. These can be found here.
The particular reduced percentages to note are:
- Catering services including restaurants and takeaways - 4.5% (normally 12.5%)
- Hotel or accommodation - 0% (normally 10.5%)
- Pubs - 1.0% (normally 6.5%)
For any VAT queries please contact Julian Millinchamp on julian.millinchamp@hazlewoods.co.uk or 01242 237661.