VAT changes

Summer Statement VAT changes

The Summer Statement VAT changes were announced this week. Broadly speaking, along with generous SDLT reliefs to get the housing market moving, bonuses for employers retaining previously furloughed employees post January 2021 and a raft of apprenticeship schemes, HMRC has also announced sweeping cuts temporarily (6 months) to VAT across the hospitality sector.  Details so far in the Treasury paper suggest accommodation, food, drinks and access to visitor attractions will benefit.  We will know more when further details are published by HMRC over the coming days.   

“Eat Out to Help Out – In order to support around 130,000 businesses and to help protect the jobs of their 1.8 million employees,25 the government will introduce the Eat Out to Help Out scheme to encourage people to return to eating out. This will entitle every diner to a 50% discount of up to £10 per head on their meal, at any participating restaurant, café, pub or other eligible food service establishment. The discount can be used unlimited times and will be valid Monday to Wednesday on any eat-in meal (including on non-alcoholic drinks) for the entire month of August 2020 across the UK. Participating establishments will be fully reimbursed for the 50% discount.

Temporary VAT cut for food and non-alcoholic drinks – From 15 July 2020 to 12 January 2021, to support businesses and jobs in the hospitality sector, the reduced (5%) rate of VAT will apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises across the UK. Further guidance on the scope of this relief will be published by HMRC in the coming days.

Temporary VAT cut for accommodation and attractions – From 15 July 2020 to 12 January 2021, to support businesses and jobs, the reduced (5%) rate of VAT will apply to supplies of accommodation and admission to attractions across the UK. Further guidance on the scope of this relief will be published by HMRC in the coming days.”

As ever, please give us a call if there’s ever anything VAT related that you’re not sure about. Sooner is always so very much better.

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