Guidance on the temporary reduced rate of VAT for hospitality, holiday accommodation and attractions
Published 3 March 2021
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This publication is available at https://www.gov.uk/government/publications/revenue-and-customs-brief-2-2021-temporary-reduced-rate-of-vat-for-hospitality-holiday-accommodation-and-attractions/guidance-on-the-temporary-reduced-rate-of-vat-for-hospitality-holiday-accommodation-and-attractions
1. Purpose of this brief
This brief explains the changes in the VAT treatment of certain supplies of hospitality, hotel and holiday accommodation, and admission to certain attractions as announced at Budget 2021.
2. Who it applies to
Organisations that make supplies of hospitality, hotel and holiday accommodation and admission to certain attractions, and their advisers.
3. Background
On 8 July 2020, the government announced that it would introduce a temporary 5% reduced rate of VAT for certain supplies of hospitality, hotel and holiday accommodation, and admissions to certain attractions. This came into force on 15 July 2020. The Chancellor of the Exchequer later announced on 24 September 2020 that the temporary reduced rate for tourism and hospitality would be extended to 31 March 2021.
The Chancellor announced at Budget 2021 that the temporary reduced rate of 5% will be extended to 30 September 2021. From 1 October 2021 the reduced rate for these supplies will be replaced by the introduction of a new reduced rate of VAT of 12.5% which will remain in effect until 31 March 2022.
4. Affected Supplies
The following supplies, which already currently benefit from the 5% reduced rate, will continue to benefit from the reduced rates through the extension:
- food and non-alcoholic beverages sold for on-premises consumption, for example, in restaurants, cafes and pubs
- hot takeaway food and hot takeaway non-alcoholic beverages
- sleeping accommodation in hotels or similar establishments, holiday accommodation, pitch fees for caravans and tents, and associated facilities
- admissions to the following attractions that are not already eligible for the cultural VAT exemption such as:
- theatres
- circuses
- fairs
- amusement parks
- concerts
- museums
- zoos
- cinemas
- exhibitions
- similar cultural events and facilities
Where admission to these attractions is covered by the existing cultural exemption, the exemption will take precedence.
The types of supplies that the relief applies to will remain unchanged when the new temporary 12.5% rate is introduced on 1 October 2021.
Further guidance on the operation of the new reduced rate will be published when it comes in to force on 1 October 2021.
5. More Information
More information about issues relating to the temporary reduced rate can be found in VAT: reduced rate for hospitality, holiday accommodation and attractions.
More information on supplies of food and drink can be found in Catering, takeaway food (VAT Notice 709/1).
You can also find more information on the provision of sleeping accommodation in hotels and holiday accommodation in Hotels and holiday accommodation (VAT Notice 709/3).
More information on the admission to attractions can be found in VAT: Admission charges to attractions.
If you have any questions about these changes please refer to VAT: general enquiries for further advice.
Check the previous Revenue and Customs Brief for the temporary reduced rate of VAT for Hospitality, holiday accommodation and attractions.
The previous Revenue and Customs Brief for the temporary reduced rate can be found in guidance on the temporary reduced rate of VAT for hospitality, holiday accommodation and attractions.