New Reduced Rate of VAT for Hospitality, Holiday Accommodation and Attractions
The temporary 5% reduced rate which currently applies to the hospitality, holiday accommodation and attractions industry came to an end on 30 September 2021 and has been replaced with a 12.5% reduced rate that will be effective from 1 October 2021 until 31 March 2022.
The rate of VAT will revert back to the standard (20%) rate from 1 April 2022.
Businesses that operate outside of the hospitality, holiday accommodation and attraction sectors may also be affected by this change of VAT rate if they make purchases from these sectors.
HMRC has further guidance on the types of supplies that are covered by the temporary reduced rate of VAT: https://www.gov.uk/government/publications/introduction-of-a-new-reduced-rate-of-vat-for-hospitality-holiday-accommodation-and-attractions/
We recommend that you ensure that you are using the latest version of your accounting software so that this reflects any software updates relating to the new VAT rate.
Samantha Sanders BSc (Hons) ACCA is a Manager within the Business Services Team at A C Mole Taunton office and regularly assists clients with VAT queries. She can be contacted on 01823 624450 or SSanders@acmole.co.uk.