Hospitality and tourism VAT rate increases to 12.5%

by | Nov 4, 2021

Arram Berlyn Gardner a multi award-winning firm of Chartered accountants, auditors and tax advisers based in central London in this blog post update us on the latest VAT position for the hospitality and tourism sector.

VAT for pubs, restaurants, holiday accommodation and entry to certain attractions increased from 5% to 12.5% last month, following the end of a tax break.

A temporary cut first introduced on 8 July 2020 saw the standard rate of VAT for struggling businesses in the hospitality and tourism sectors fall from 20% to 5%. That short-term relief was in place until 30 September 2021, at which point the rate for businesses in these sectors increased to 12.5% until 31 March 2022.

Under the Treasury’s current plans, VAT on hospitality and tourism sector purchases will return to its pre-pandemic level of 20% on 1 April next year. A coalition of the UK’s biggest hospitality and tourism bodies fear returning the VAT rate to 20% risks “derailing the recovery while businesses are still recovering”.  The coalition wants the 12.5% rate to be in place permanently.

Speak to us about any aspect of VAT please contact us on 020 7330 0000. 

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