Temporary reduced VAT rate for leisure and hospitality to end on 31 March 2022

On 8 July 2020, as an urgent response to the pandemic, the government announced a number of VAT measures including a temporary reduction of the VAT rate for the hospitality, hotel and holiday accommodation sectors as well as admission to certain attractions.

This VAT cut, from 20% to 5% was designed to boost customer demand in response to the economic crisis caused by the pandemic.

This cut in the VAT rate took effect from 15 July 2020.

In the spring 2021 Budget an extension to the 5% rate was announced until 30 September 2021 with the VAT rate for the sector increasing to 12.5% from 1 October 2021 until 31 March 2022.

The affected supplies which have benefitted from the reduced rates are:

  • 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 and similar cultural events and facilities.

Standard rate will apply from 1 April 2022

For businesses within the sector, the temporary rates have no doubt been a welcome measure but it’s soon coming to an end.

From 1 April 2022, the VAT rate for the sector will return to the standard rate – currently 20%.


This article is for general guidance only. It provides an outline, and may not include points which are important to your situation. You should not depend on this blog without taking advice based on the full facts of your case. The information given was correct at the time of publication.

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