The VAT rate that applies to certain supplies of hospitality, hotel and holiday accommodation, and admission to certain attractions changes on 1 October 2021. The current 5% rate for these supplies will be replaced by the introduction of a new reduced rate of VAT of 12.5% which will remain in effect until 31 March 2022.
The UK government’s VAT deferral new payment scheme for settling VAT payments deferred between 20 March and 30 June 2020 due to COVID-19 is now open for businesses to voluntarily opt-in.
HMRC has updated its guidance explaining how to settle VAT payments deferred between 20 March and 30 June 2020 due to COVID-19.
Following a resurgence in the number of COVID-19 cases in the UK, Rishi Sunak yesterday announced further VAT measures to support the economy in his Winter Economy Plan statement.
Ireland: Temporary VAT rate cut
Ireland has unveiled a Stimulus Plan of tax, loan and spending measures designed to boost the country’s economic recovery from the COVID-19 crisis. The Plan includes a temporary reduction in the Irish standard rate of VAT from 23% to 21%.
UK temporary VAT rate cut for the hospitality and tourism sectors
The UK has implemented a temporary VAT rate cut from 20% to 5% for the hospitality and tourism sectors following the coronavirus crisis, to apply until 12 January 2021. UPDATE: Since this VAT alert was published, the 5% temporary VAT rate was extended to 30 September 2021. In addition, from 1 October 2021 a new temporary reduced VAT rate of 12.5% was introduced (see our blog article "New VAT rate for hospitality and tourism with effect from 1 October 2021" for further information).