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 12 January 2021.
These changes are being brought in as an urgent response to the coronavirus (COVID-19) pandemic to support businesses severely affected by forced closures and social distancing measures.
Hospitality
If you supply food and non-alcoholic beverages for consumption on your premises, for example, a restaurant, café or pub, you’re currently required to charge VAT at the standard rate of 20%. However, when you make these supplies between 15 July 2020 and 12 January 2021 you will only need to charge 5%.
You will also be able to charge the reduced rate of VAT on your supplies of hot takeaway food and hot takeaway non-alcoholic drinks.
My question is this, has anyone actually seen restaurants, pubs etc reduce their bills accordingly since this reduction came into effect?