Be the first to know with VAT IT Reclaim

Published:September 28, 2020

UK VAT Rate Cut in Hospitality and Tourism Extended

This week, HMRC extended its UK VAT rate cut on hospitality and tourism to the 31 March 2021

UK VAT Rate Cut in Hospitality and Tourism Extended

Originally the VAT rate cut would be granted till 13 January 2021 but will now be extended by a further two months. 

The lowered VAT Rates have been in effect since 15 July 2020 and were slashed by a whopping 15% from 20% to 5% and comes at a cost of £4 billion to the UK government.

The lowered VAT rate is applied to both eat-in and takeout food, accommodation and attractions. Its goals are to provide relief to the suffering hospitality industry and to assist in securing jobs in the sector. 


The UK VAT Cuts Cover the following:  
  • Restaurants; 
  • cafes; 
  • pubs (ex alcohol); 
  • All forms of accommodation
  • Take away food
  • Entrance fees for entertainment outings such as theatre, fairs, museums amusement parks and concerts etc.
Continued Relief

The news of the extension will be welcomed by both the public and the hospitality sector. 

As Chancellor Rishi Sunak pointed out in July, the initiative combined supports over 2.4 million staff across 150,000 businesses. The VAT cut alone is set to save households around £160 per year. 

According to Sunak, 80% of hospitality firms stopped trading in April and 1.4 million hospitality workers have been furloughed under the Coronavirus Job Retention Scheme – the highest proportion of any sector. (source)

This article was originally published by our sister company



Subscribe to our monthly VAT newsletter

Latest news and updates

Slovenia eases VAT requirements where reverse charges applies

Under new regulations, nonresident companies that make supplies in Slovenia no longer need to register for VAT if all supplies are subject to the

read more

UK music industry braces for VAT increase on concert tickets

Covid hit the entertainment and hospitality sectors harder than most. To help alleviate the financial pressure, the UK government introduced a number

read more

UK plastic packaging tax: How to become compliant

The UK plastic packaging tax takes effect from 1 April 2022. Any business that imports non-recycled plastic could be affected. 

read more