No extension for hospitality sector VAT reduction

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%
Pubs 6.5% 1% 4%

 

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.

 

Other posts you might like:

Auto Insight Magazine – How to avoid PAYE penalties

In the latest edition of the SMTA magazine Auto Insight, Tax Specialist Keith Hunter discusses the main areas of risk to employers surrounding PAYE, especially now that HMRC have adopted a intelligence / risk-based approach to PAYE reviews, and how to avoid PAYE penalties.

read more

Property & Landlord Hub

Welcome to our new Property and Landlord Hub. Here you will find news, updates, FAQs and advice on property and landlord issues. 

read more