The UK will introduce a temporary reduced rate of 5% of value added tax (VAT) on certain supplies, aimed at helping the hospitality and tourism sectors that have been affected by the coronavirus (COVID-19) pandemic.
The UK Chancellor’s summer statement announced a targeted reduced rate of VAT would be introduced to provide relief for certain sectors affected by the COVID-19 pandemic.
The subject supplies—currently subject to VAT at a standard rated of 20%—would be subject to the new rate of 5% effective from 15 July 2020 to 12 January 2021. The types of supply subject to the 5% rate of VAT include food and non-alcoholic drinks consumed in restaurants, pubs, bars, cafés and similar premises across the UK and hot takeaway food and non-alcoholic drinks by those suppliers. The reduced rate of VAT will also apply to supplies of hotel and holiday accommodations and admission to attractions across the UK.
Read a July 2020 report prepared by the KPMG member firm in the UK
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