When the Chancellor announced a temporary cut in the rate of VAT for the hospitality sector and attractions in his Summer Statement on 8 July there were a number of areas that needed clarification. The reduction applies to supplies made between 15 July 2020 and 12 January 2021.
The reduction is one of a number of additional measures announced to support the economy as the COVID-19 pandemic continues to affect individuals and businesses.
VAT on food and non-alcoholic drinks
From 15 July 2020 to 12 January 2021, to support businesses and jobs in the hospitality sector:
- A 5% rate of VAT applies to supplies of:
- food and non-alcoholic beverages sold for on-premises consumption, for example, in restaurants, cafes and pubs
- hot takeaway food and hot takeaway non-alcoholic beverages.
- Alcoholic drinks will remain subject to the standard 20% rate.
- Food and drink supplied as part of a supply of catering services for consumption off-premises continue to be standard rated.
HMRC have now set out more details of which supplies will attract the 5% temporary rate as well as the impact on invoicing, deposits and the flat rate scheme.
We offer a wide range of services for the hospitality industry. Our team of chartered accountants have a wealth of experience to suit your hospitality needs. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.
Our fantastic team at A&C Chartered Accountants are here to help.