The Chancellor announces a temporary VAT rate cut for the hospitality and tourism sectors

8 July 2020| CATEGORIES: VAT rates| TAGS: Covid measures, hospitality, tourism, VAT rate cut

In his Plan for Jobs speech today Rishi Sunak, the Chancellor of the Exchequer, announced a temporary VAT rate cut for the UK hospitality and tourism sectors to aid recovery following the COVID-19 pandemic.  Spending on restaurants, travel and entertainment, typically worth around a fifth of total consumption, had fallen by around 80% at its lowest point.

Temporary VAT cut for food and non-alcoholic drinks

From 15 July 2020 to 12 January 2021, to support businesses and jobs in the hospitality sector, the reduced (5%) rate of VAT will apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises across the UK. Further guidance on the scope of this relief will be published by HMRC in the coming days.

Temporary VAT cut for accommodation and attractions

From 15 July 2020 to 12 January 2021, to support businesses and jobs, the reduced (5%) rate of VAT will apply to supplies of accommodation and admission to attractions across the UK. Further guidance on the scope of this relief will be published by HMRC in the coming days.

The Chancellor’s full statement is available here.

We will provide further information on these changes once the HMRC guidance has been published.