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UK: Temporary rate reduction, VAT for hospitality and tourism sector (COVID-19)

UK: Temporary rate reduction, VAT for hospitality

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.


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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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