Today the Chancellor has announced that the reduction in the rate of VAT applicable to hospitality and leisure sectors from the standard 20% to the reduced 5% rate of VAT will be extended.
The reduction was previously announced to be in effect from 15 July lasting until 12 January 2021.
Today Rishi Sunak has announced this will be extended to last until 31 March 2021.
The reduction applies to food and non-alcoholic drinks as well as accommodation and admission to attractions across the UK.
Care will need to be taken in accounting for VAT to apply the correct rates and account for the change and when the rate is again increased.
Some businesses have chosen to pass on this saving to customers, in an attempt to encourage revenues, while others have maintained prices and used the saving in VAT towards ongoing bills to help their business survive.
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