New reduced VAT rates
On 1st October a new reduced VAT rate of 12.5% will come into effect for products and services relating to hospitality, hotel and holiday accommodation. This is to help businesses transition back to the standard 20% rate in Spring next year.
Most pertinent to convenience and fuel retailers is that hot takeaway food and drink is included. So, if you have a café, hot food counter or supply take away coffee the VAT rate on such items will be going up from the current 5% to 12.5%.
In July 2020 the government announced a temporary 5% reduced rate of VAT to certain supplies relating to hospitality, hotel and holiday accommodation and admissions to certain attractions.
This temporary relief was a response to the coronavirus emergency with the objective to support businesses affected by the pandemic and social distancing measures.
The temporary time period of 5% VAT has been extending twice since 2020 and will now come to an end on 30th September.
The new reduced rate of 12.5% will then apply – effective until 31 March 2022. The objective is to support jobs and businesses, as the economy opens, following the lifting of COVID-19 restrictions.
As an EPOS provider, we’ll be in touch with all our customers in the coming days, guiding them through the process of how to make the changes needed.
Feel free to contact us if you have any questions in the meantime.
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