As part of the Finance (Covid-19 and Miscellaneous Provisions) Act 2021, the relevant VAT legislation is amended to formalise the extension of the 9% VAT rate until 31st August 2022 while also reintroducing this reduced rate to hospitality/entertainment sector
Reduced 9% VAT rate
In a welcome development and forming part of business support measures to business in dealing with the financial impact of Covid19, the reduced 9% VAT rate in relation to goods and services such as newspapers and periodicals, electronic publications, sporting facilities has been extended until 31st August 2022. This reduced rate has also been reintroduced for several other hospitality and related tourist activities.
Hospitality Sector support
In addition, for the period from 31st December 2021 to 31st August 2022, the followings items are subject to the 9% VAT rate:
- catering and restaurant supplies (excluding alcohol, soft drinks and bottled water)
- hot takeaway food and hot tea and coffee
- hotel lettings, for example, guesthouses, caravan parks or camping sites admissions to cinemas, theatres, certain musical performances, museums, art galleries or exhibitions
- amusement services of the kind normally supplied in fairgrounds or amusement parks
- admission to an open farm
- hairdressing services
- certain printed matter, such as brochures, leaflets, catalogues or printed music (excluding books).
The reduced rate of VAT applies to the above items prior to 1st November 2020.
It is envisaged that the application of this reduced rate will provide cash flow support to businesses coming out of the Covid19 restrictions and stimulate trade activity.
If you have any questions in relation to the above, or if you would like to discuss this topic further, please contact a member of the Mazars VAT team below: