VAT increase for hospitality businesses

On 8 July 2020 the government announced that it intended to to apply a temporary 5% reduced rate of VAT to certain supplies relating to hospitality, hotel and holiday accommodation and admission to certain attractions..

The reduced rate was initially introduced to last for a temporary period between 15 July 2020 and 12 January 2021 and was subsequently extended to 31 March 2021. Then, the government announced at Budget 2021 that the temporary reduced rate will be extended for a further six-month period at 5% until 30 September 2021.

On 1 October 2021 a new reduced rate of 12.5% was introduced, which will end on 31 March 2022.