Coronavirus: Support from HMRC
Reduced VAT rate for hospitality, holiday accommodation and attractions
VAT registered businesses may apply a temporary 5% reduced rate of VAT to certain supplies relating to hospitality, hotel and holiday accommodation and admission to certain attractions. The temporarily reduced rate of 5% has been extended until the end of September 2021 followed by a rate of 12.5% rate from 1 October 2021 to 31st March 2022.
Eligible attractions for the temporarily reduced rate of VAT include shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions and other cultural events and facilities, but do not include admission to sporting events. Live performances that charge a fee to view online may be eligible, depending on circumstances and assuming they are not already covered by a Cultural VAT exemption.
- It applies to all food and non-alcoholic drinks consumed on the premises
- It applies to hot takeaway food and drinks
- It applies to all holiday accommodation from camping through to hotels
- It applies to standard VAT rated attractions
- Flat Rate VAT Scheme rates will be reduced to take into account the reduction
- If you buy in and resell travel, accommodation and certain other services can use the Tour Operators Margin Scheme to simplify your calculations
If you have any detailed questions about the reduced rate of VAT you can contact:
- Telephone: 0300 200 3700. Outside UK: +44 2920 501 261
- Email VATtourismandhospitality@hmrc.gov.uk
Guidance for takeaway food
If you deferred VAT payments due between 20 March 2020 and 30 June 2020 and still have payments to make, you can:
- pay the deferred VAT in full, on or before 31 March 2021
- join the VAT deferral new payment scheme – the online service is open between 23 February 2021 and 21 June 2021. The new scheme lets you pay your deferred VAT in equal instalments, interest free and choose the number of instalments, from 2 to 11 (depending on when you join)
- contact HMRC on Telephone: 0800 024 1222 by 30 June 2021 if you need extra help to pay
You may be charged interest or a penalty if you do not:
- pay the deferred VAT in full by 31 March 2021
- opt into the new payment scheme by 21 June 2021
- agree extra help to pay with HMRC by 30 June 2021
Business Rates Holiday
A 100% business rates holiday for all retail, hospitality and leisure businesses in England has been confirmed until the end of June 2021. This will be followed by a 66% discount until 31st March 2022.
- Eligible businesses include properties used for; shops, restaurants, cafes, drinking establishments, cinemas, live music venues, assembly and leisure, hotels, guest and boarding premises and self-catering accommodation.
- The discount is being capped at £2 million per business for properties that were required to be closed on 5 January 2021, or £105,000 per business for other eligible properties.
- The government will legislate to ensure that the business rates relief repayments that have been made by certain businesses are deductible for corporation tax and income tax purposes.
- Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.
- There is no action for you. Businesses that received the 2020/21 rates relief should automatically see this reflected in the bill they receive from their local authority.
- You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator.
- Any enquiries on eligibility for, or provision of, the reliefs should be directed to the relevant local authority through the links we have provided or the Business Support Helpline: 03333 602300 (Monday to Friday, 8.30 am to 6.30 pm)