The initial reduced rate of 5% has had effect from 15 July 2020. The subsequent 12.5% reduced rate will have effect from 1 October 2021 until 31 March 2022.
Will VAT reduction be extended?
The Chancellor announced at Budget 2021 that the temporary reduced rate of 5% will be extended to 30 September 2021. From 1 October 2021 the reduced rate for these supplies will be replaced by the introduction of a new reduced rate of VAT of 12.5% which will remain in effect until 31 March 2022.
Is VAT reduced due to Covid?
The temporary reduced rate will apply to supplies that are made between 15 July 2020 and 31 March 2021. These changes are being brought in as an urgent response to the coronavirus (COVID-19) pandemic to support businesses severely affected by forced closures and social distancing measures.
Will VAT go up in 2021?
The new rate of VAT for the tourist and hospitality industry will be 12.5% from 1 October 2021 to 31 March 2022. … It was due to revert to 20% from 1 April 2021. The industry will be pleased with the six-month extension of the 5% rate and the half-way house of 12.5% until we’re back to 20% as normal on 1 April 2022.
Is VAT reduced on take away?
Cold takeaway food and drink is zero-rated, as long as it’s not of a type that’s always standard-rated (such as potato crisps, sweets and some beverages including bottled water). Hot takeaway drinks are standard-rated (or temporarily reduced rated as long as they are non-alcoholic).
What qualifies for reduced rate VAT?
The reduced rate of VAT will apply to:
hot / cold food and non-alcoholic beverages for consumption on the business premises, for example, cafes, restaurants and pubs. Cold takeaway food continues to be subject to VAT at 20% or 0% under the existing rules. hot takeaway food and hot takeaway non-alcoholic drinks.
How much is VAT during Covid?
The temporary cut to the rate of VAT on food, accommodation and entry fees to attractions from 20% to 5%, introduced on 15 July 2020, is extended by Finance Act 2021 until 30 September 2021.
Is food VAT exempt?
Most food is VAT-free but you do pay VAT on some food. Some items for human consumption are standard-rated. This includes catering, alcoholic drinks, confectionery, crisps and savoury snacks, hot food, sports drinks, hot takeaways, ice cream, soft drinks and mineral water.
What is the VAT threshold 2021 2022?
General description of the measure
The taxable turnover threshold, which determines whether a person must be registered for VAT, will remain at £85,000 until 31 March 2024. The taxable turnover threshold, which determines whether a person may apply for deregistration, will remain at £83,000 until 31 March 2024.
How much is VAT in the UK 2021?
Standard VAT rate (20%)