Governance & Compliance 72: VAT Temporary Reduced Rate Increase to 12.5% From 01/10/2021

From 1st October 2021, VAT chargeable on supplies of holiday accommodation and hospitality /catering (i.e. the sale of food and non-alcoholic beverages for consumption on the premises) will be temporarily changed to 12.5%. This rate will apply for 6 months, from 1st October 2021 to 31st March 2022. Supplies of holiday accommodation and catering will temporarily attract VAT at the rate of 12.5% rather than the temporary rate of 5% or the standard 20% rate.

  • Supplies of hot takeaway food and hot takeaway non-alcoholic drinks will also attract VAT at the 12.5% rate.
  • The provision of catering to school staff and visitors i.e. meals and drinks sold to staff (non-pupils) for consumption in school dining rooms, will attract VAT at the temporary 12.5% rate
  • Cold food purchased for consumption off the premises i.e. cold sandwiches purchased by staff for consumption in the staff room will still be zero rated
  • Catering supplied to pupils is still outside the scope and does not attract VAT.

Catering can be a complex issue for VAT, If you would like any help or advice please contact the VAT team on: vat@devon.gov.uk

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