No extension has been granted to the leisure and hospitality sector for use of the reduced 12.5% VAT rate on eligible supplies including food, non-alcoholic beverages and hotel and holiday accommodation. The VAT rate applied to these supplies will revert to 20% from 1 April 2022 as planned.
The temporary 5% VAT rate that has applied to supplies made in the tourism and hospitality sector since the start of the pandemic comes to an end at the end of September. The rate then increases to 12.5% from 1 October until 31 March 2022 when it reverts to the standard rate. For those businesses operating in this sector this will mean an amendment to their accounting software and possibly prices. Note that the 20% rate continues to apply to the sales of alcohol. Where deposits and other payments are taken before 30 September 2021 the 5% rate would apply to that supply as that would be the tax point for the supply.
Guidance has been updated to reflect the extension of the VAT reduced rate for tourism and hospitality from 12 January to 31 March 2021. The government made an announcement on 8 July 2020 allowing VAT registered businesses to apply a temporary 5% reduced rate of VAT to certain supplies relating to: hospitality hotel and holiday accommodation admissions to certain attractions The temporary reduced rate will apply to supplies that are made between 15 July 2020 and 31 March 2021. See here for details. Guidance has been updated to reflect that the VAT reduced rate for tourism and hospitality has been extended to 31 March 2021. See here for details.
Autumn Statement 2023 On 22 November 2023, Chancellor Jeremy Hunt presented his Autumn Statement to Parliament and started making, in his words, the long-term decisions necessary to strengthen the economy and build a brighter future. Fuelled by falling inflation and stabilised public finances, focus is now being applied to reducing debt, cutting tax and rewarding hard work. Headlines included generous National Insurance Contribution (NIC) cuts for workers and the self-employed and the ‘biggest permanent tax cut in modern British history for businesses’. Some other anticipated measures appear to be on hold ahead of a full Budget next Spring and an expected 2024 general election. In this edition, DPC Accountants Stoke-on-Trent talk more about the Autumn Statement headlines and other measures announced. Please note that ‘tax years’ run to 5 April each year and that, for example, 2024/25 signifies the year to 5 April 2025. AUTUMN STATEMENT SPECIAL – DISCUSSING ALL
Francesca Knight Francesca Knight TAX COMPLIANCE SUPERVISOR I’m Frankie and I am currently the Tax Compliance Supervisor working in the personal tax department here at DPC, I aim to provide a personalised and professional service to help you meet deadlines and take the stress out of your finances so that you can concentrate on what you do best whether it be as a director, sole trader, partner, landlord or high net worth individual. I have completed my ATT tax qualification and have acquired a BA(Hons) business management degree (Accounting). I’ve had supervisory and managerial job positions previously in the hospitality industry which has prepared me for my client focused role where great client service is at the forefront of my priorities. I pride myself on being extremely organised and enthusiastic in my job role with a strong work ethic and positive attitude so I will always endeavour for myself and
From April 2021, a new grant will be available to help businesses to reopen. Non-essential retail will get £6,000 per premises. Hospitality and leisure including personal care and gyms will get £18,000 per premises. If your business is eligible for the previous grants available you should apply as soon as possible before 31 March 2021, details of the grants available to you locally will be found on your local council website.
Eligible retail, hospitality and leisure properties will pay no business rates for three months from 1 April to 30 June 2021. From 1 July 2021, business rates will be discounted, by a further 66% business rates relief until 31 March 2022
The reduced 5% rate of VAT for goods and services supplied by the tourism and hospitality sector has been extended to 30 September 2021. To help support businesses further there will be a transitional rate of 12.5% from 1 October to 31 March 2022 with the standard rate of 20% applying from 1 April 2022. The VAT registration and deregistration thresholds are unchanged at £85,000 and £83,000, respectively until April 2024.
The government has extended a ban on evictions of commercial property tenants until the end of March 2021, in a move that will be welcomed by struggling restaurant owners and retailers. A moratorium on business evictions was introduced earlier this year to help businesses ride out the virus crisis, and had been extended to 30 September. It was then extended to the end of 2020 and now it will run until March 2021. The support is intended for businesses struggling most during the pandemic, such as hospitality, however those that can afford to pay their rent should continue to do so. Further guidance is to be published to support tenants and landlords to continue to work together to agree rent payment options. More information can be found here.
The Additional Restrictions Grant (ARG) provides local councils with grant funding to support closed businesses that do not directly pay business rates as well as businesses that do not have to close but which are impacted. In addition, larger grants can be given than those made through LRSG (Closed). Local councils can determine which businesses to target and determine the amount of funding from the ARG. Local councils have the freedom to determine the eligibility criteria for these grants. However, the Government expects the funding to help those businesses which – while not legally forced to close – are nonetheless severely impacted by the restrictions. This could include: businesses which supply the retail, hospitality, and leisure sectors businesses in the events sector business required to close but which do not pay business rates See here for details.
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