VAT News

VAT Rate steps back up in Hospitality Sector – 1 October 2021


The hospitality sector, until the 30 September, is still able to benefit from the lower 5% VAT rate brought in as a result of the impact of the pandemic. Rather than immediately return back to the normal Standard VAT rate – currently 20% here in the UK – the Spring Budget saw a stepped process announced with the VAT rate on specified supplies in the sector moving up initially to a 12.5% VAT rate with effect from the 1 October 2021.

This 12.5% VAT rate will apply until the 31 March 2022 when the rate will return to the 20% VAT treatment. As a quick reminder this reduced VAT rate treatment has been applying to supplies of:

  • Catering and non-alcoholic beverages for consumption on premises
  • Hot takeaway food and hot takeaway non-alcoholic drinks.
  • Hotel and holiday accommodation including charge fees for caravan & tent pitches
  • Admission to certain attractions

On the admission point it is worth remembering that if you qualify as a “Cultural Body” in the VAT context your admission charges are VAT exempt in liability and will not qualify for the reduced rate.

All supplies made from the 1 October 2021 will need to have VAT at the 12.5% rate calculated on them and feed this into the VAT return declaration for that period.


If VAT gets complicated on your journey back to the standard VAT rate treatment across the hospitality sector then don’t hesitate to give Centurion a call or email us on

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