Effective from 15 July 2020 to 12 January 2021

Guidance has been issued by HMRC on the temporary 5% reduced rate of VAT to support the hospitality sector.

The rate cut applies to specific supplies of hospitality, hotel and holiday accommodation and admission to certain attractions.

The temporary 5% reduced rate is effective  from 15 July 2020 to 12 January 2021 and applies to the following supplies:

  • food and non-alcoholic beverages sold for on-premises consumption, such as  in restaurants, cafes and pubs;
  • hot takeaway food;
  • hot takeaway non-alcoholic beverages;
  • sleeping accommodation in hotels or similar establishments;
  • holiday accommodation; and
  • pitch fees for caravans and tents, and associated facilities.

For takeaways he reduced rate vat of 5% only applies to hot takeaway food and non alcoholic drinks. Cold takeaway food and drinks may be zero rated 0% like a sandwich or standard rated at 20% like crisps chocolate and ice cream.

For food and non alcoholic drinks consumed on premise the applicable vat rate is 5% regardless of whether the  food item is a sandwich, crisps, chocolate or ice cream.

Reduced rate 5% also applies to some attractions

The 5% reduced rate will also apply to admissions to the following attractions that are not eligible for the cultural VAT exemption:

  • theatres,
  • circuses,
  • fairs,
  • amusement parks,
  • concerts,
  • museums,
  • zoos,
  • cinemas,
  • exhibitions, and
  • similar cultural events and facilities

The cultural VAT exemption takes precedent over the temporary reduced 5% VAT rate.


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