Summer Economic Update – VAT Measures
As announced by the Chancellor yesterday during the summer economic update, a number of temporary VAT reductions have been introduced to help boost several sectors most impacted by the ongoing coronavirus pandemic.
Firstly in order to boost the hospitality and tourism industry the VAT rate applicable to supplies of accommodation and admission to attractions, which previously stood at the standard rate of 20%, has been lowered to the reduced rate of 5%.
Furthermore a reduction in the VAT rate applicable to food and non-alcoholic drinks has also been announced, supporting businesses operating in the sector. Where the VAT rate applicable to supplies of food and non-alcoholic beverages is 20%, this will be cut to the reduced rate of 5%.
Both of the reductions detailed above will apply from 15th July 2020 to 12th January 2021.
If you or your client operate in the sectors affected by this announcement and require clarification whether your supplies will be subject to a temporary VAT reduction as well as the impact this may have on your business, please call our free VAT helpline for expert advice.
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