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.
