Temporary reduced rate of VAT for hospitality and hotel accommodation and attractions

Support provided by HMRC

What does this involve?

The UK Government is allowing VAT-registered businesses to apply a temporary reduced rate of VAT of 5% to certain products and services relating to:

  • hospitality
  • hotel and holiday accommodation
  • admissions to certain attractions

The temporary reduced rate of 5% has been extended, and will now apply to transactions between 15 July 2020 and 30 September 2021.

From 1 October 2021 until 31 March 2022, a VAT rate of 12.5% will apply.

These changes are being brought in as an urgent response to the coronavirus (COVID-19) pandemic to support businesses severely affected by forced closures and social distancing measures.

Guidance is available on which supplies are eligible for the reduced rate of VAT and how the changes will affect different types of businesses.

Am I eligible?

Yes, if you are a VAT-registered business delivering products or services in hospitality, hotel and holiday accommodation or admission to certain attractions. Full details of eligible supplies are available on the UK Government website.

What does this cost?

This is a free service.

Who is this for?

VAT-registered businesses dealing in hospitality, hotel and holiday accommodation and attractions.

Important information

The reduced rate of VAT means that some businesses may have to alter how they carry out their VAT calculations. This includes businesses which use the Flat Rate Scheme and the Tour Operators Margin Scheme. If your business uses one of these schemes, the UK Government guidance includes information on how the changes will affect you.

There may be situations where you receive payments or issue invoices before 15 July 2020 for supplies that take place on or after 15 July 2020. The guidance also covers how to handle these situations.

Next steps

Visit the UK Government website for more information and to read the full guidance.

Support provided by HMRC

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