- On 8 July 2020, HMRC published new guidance on the temporary reduction in the VAT rate from 20% to 5% for supplies relating to hospitality, holiday accommodation and certain attractions.
- From 15 July 2020 to 12 January 2021, the reduced (5%) rate of VAT will apply to these supplies subject to meeting the criteria set out in the guidance.
- The following notices have also been updated to reflect this change:
- The Value Added Tax (Reduced Rate) (Hospitality and Tourism) (Coronavirus) Order 2020 gives these changes their legal basis.
- The guidance also confirms that the relevant flat rate percentages for categories covered by the reduced rate will be adjusted temporarily. Further details are expected to be published in due course.
- There may be situations where you receive payments or issue invoices before 15 July 2020 for supplies that take place on or after 15 July 2020.
- More information about this can be found in sections 30.7.4 to 30.9.2 of VAT guide (VAT Notice 700).
See the brief addressing this change here.
The new guidance can be found here.
Aspire Business Partnership ("Aspire") provide WK1 with practical and commercially sound advice in relation to all aspects of compliance, business strategy and conflict resolution. WK1 engage Aspire on a retained basis through which Aspire provide WK1 with advice on an ad-hoc basis.
https://www.aspirepartnership.co.uk/News/3475/covid-19-5-vat-hospitality-rate
