The rate of VAT on food, accommodation and entry fees to attractions is scheduled to increase from 5% to 12.5% from 1 October 2021.

The rate was reduced to 5% in July 2020 as part of the government's package of measures to help businesses during the COVID-19 pandemic. Finance Act 2021 includes clauses to increase the rate to 12.5% between 1 October 2021 and 31 March 2022, with the standard rate of 20% due to return from 1 April 2022. These clauses can however be amended by Treasury Regulation should the Chancellor decide to extend the rate cut at any time.

The Reduced rate applies to supplies of:

  • Admissions to attractions that are not already eligible for the cultural VAT exemption including:
  • Sleeping accommodation in hotels or similar establishments, holiday accommodation, pitch fees for caravans and tents, and associated facilities.
  • Hot takeaway food and hot takeaway non-alcoholic beverages.
  • Food and non-alcoholic beverages sold for on-premises consumption, for example, in restaurants, cafes and pubs.
    • Theatres.
    • Circuses and fairs.
    • Amusement parks.
    • Concerts.
    • Museums and exhibitions.
    • Zoos.
    • Cinemas.
  • It does not apply to sporting events, or to alcoholic drinks which continue to be standard rated at 20%.

Useful guides on this topic

COVID-19: Reduced rate VAT
The temporary cut to the rate of VAT on food, accommodation and entry fees to attractions from 20% to 5%, introduced on 15 July 2020, is extended by Finance Act 2021 until 30 September 2021.

COVID-19: VAT payments
COVID-19 VAT payment deferral measures for VAT registered business.

Food: Catering and takeaway
There is sometimes confusion as to how food is treated for VAT purposes. If the food is purchased from a supermarket, one rule may apply. If the same food is bought from a café a different rule could apply.

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