Since the 15 July 2020, a temporary 5% reduced rate of VAT applied to certain supplies due to the impact of COVID 19. The rate broadly applied to:
- hotel and holiday accommodation
- admissions to certain attractions
The temporary reduced rate initially applied to 31 March 2021 however, this was subsequently extended until 30 September 2021.
It has now been announced that from 1 October 2021 the rate will rise to 12.5% until 31 March 2022. After this date we expect the rate to revert to 20%, as it was before the COVID 19 changes. Most software packages are ready for the change with new tax codes setup ready for use.
You may also be impacted by the VAT rate change if you make purchases from these sectors. i.e for business hotel trips.
If you would like any assistance with the new rate and how this should be applied to transactions that cross over the change in rate period, please get in touch with your usual Wheelers contact.