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VAT Increase From Today

1st October sees hospitality industry VAT rate increase from 5% to 12.5%.

From 1 October 2021 VAT on hot and cold food and drink to be consumed on the premises and supplies of hot takeaway food and drink to be consumed off the premises will be increased from 5% to 12.5%.

The temporary 5% reduced rate announced in July 2020 was scheduled to end on 30 September 2021 and then increased to 12.5% until March 2022. The tax will then return to its pre-pandemic rate of 20% in April 2022.

Regulation 55K of the VAT Regulations 1995 will also be amended when the 12.5% reduced rate is introduced to ensure that businesses in these sectors that use the flat-rate scheme will also be able to proportionately benefit from this rate for the period that it applies.

For further information see the UK goverment announcement.

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