Many in the hospitality sector were hoping that the Chancellor would extend the 12.5% reduced rate that has applied since 1 October 2021 but, as scheduled, the rate has reverted to 20% from 1 April 2022.
The increase will apply to hospitality, visitor attractions and catering services including restaurants and takeaways.
VAT Flat Rate Scheme
This has a consequential effect on the VAT Flat Rate Scheme percentages from 1 April 2022 as set out below:
|Type of Business||Before 15 July 2020 & from 1 April 2022||15 July 2020 to 30 September 2021||1 October 2021 to 31 March 2022|
|Catering services including restaurants and takeaways||12.5%||4.5%||8.5%|
|Hotel or accommodation||10.5%||0%||5.5%|
Affected businesses should ensure that their pricing policies and internal systems and processes are updated for the 1 April 2022 change in VAT rate. Our VAT team can help with this.
if you need any assistance with this issue, please get in touch.