From 1 October 2021, the hospitality sector VAT rate will increase from 5% to 12.5% until 31 March 2022, after which time it will return to the standard rate, currently at 20%.
On 15 July 2020, the UK government temporarily applied a reduced rate of VAT (5%) to certain supplies in the tourism and hospitality sectors to support businesses and protect jobs affected by the pandemic. This was aimed at supporting the reopening of the economy following the lifting of lockdown restrictions and to help encourage activity like eating out in restaurants to return.
The 12.5% transition rate aims to provide continued support to businesses most severely impacted by measures taken to address the pandemic.
You can find out more information here. Introduction of a new reduced rate of VAT for hospitality, holiday accommodation and attractions – GOV.UK (www.gov.uk)
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