VAT Reduction updated 13 July 2020
From 15 July until 12 January 2021, the UK government will cut VAT from 20% to 5% on any eat-in or hot takeaway food and drinks from restaurants, cafes and pubs, excluding alcohol. This VAT reduction also applies to all holiday accommodation in hotels, B&Bs, campsites and caravan sites, as well as attractions like cinemas, theme parks and zoos.
The rules for food and drink sales by pubs can be summarised in brief as follows:
VAT payment deferral
VAT payments for quarters ended 29 February, 31 March & 30 April 2020 can be deferred, meaning businesses will not need to make VAT payments until the end of June 2020. Businesses will then have until the end of the 2020-21 tax year (ie 31 March 2021) to settle any liabilities that have accumulated during the deferral period.
The deferral applies automatically and businesses do not need to apply for it. VAT refunds and reclaims will be paid by the government as normal.
Find out more here and here.
From 15 July until 12 January 2021, the UK government will cut VAT from 20% to 5% on any eat-in or hot takeaway food and drinks from restaurants, cafes and pubs, excluding alcohol. This VAT reduction also applies to all holiday accommodation in hotels, B&Bs, campsites and caravan sites, as well as attractions like cinemas, theme parks and zoos.
The rules for food and drink sales by pubs can be summarised in brief as follows:
- On-site consumption: All sales of food (hot and cold) and drink will be subject to the reduced VAT rate, apart from alcoholic drinks, which are still subject to 20% VAT;
- Takeaway sales: If it is hot food or a hot drink being sold, and it is not alcoholic, it is subject to 5% VAT – otherwise 20%.
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VAT payment deferral
VAT payments for quarters ended 29 February, 31 March & 30 April 2020 can be deferred, meaning businesses will not need to make VAT payments until the end of June 2020. Businesses will then have until the end of the 2020-21 tax year (ie 31 March 2021) to settle any liabilities that have accumulated during the deferral period.
The deferral applies automatically and businesses do not need to apply for it. VAT refunds and reclaims will be paid by the government as normal.
Find out more here and here.
