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HM Revenue & Customs (HMRC) has published guidance on temporary cuts to the rate of VAT from 20 per cent to five per cent from Wednesday 15 July 2020 to 12 January 2021 for certain goods and services in the hospitality and tourism sectors.
The reduced rate was announced by the Chancellor at the Summer Economic Update on 8 July 2020 and applies to:
The reduction also applies to admission to the following attractions, where they do not qualify for the cultural VAT exemption:
The guidance informs small businesses that use the Flat Rate Scheme that certain percentages have been reduced in line with the new temporary five per cent rate of VAT.
Further guidelines also set out the arrangements that apply where supplies straddle the temporary reduced rate