Many in the hospitality sector were hoping that the Chancellor would extend the 12.5% reduced rate that has applied since 1 October 2021 but, as scheduled, the rate has reverted to 20% from 1 April 2022.
The increase will apply to hospitality, visitor attractions and catering services including restaurants and takeaways.
This has a consequential effect on the VAT Flat Rate Scheme percentages from 1 April 2022 as set out below:
| Type of Business | Before 15 July 2020
and from 1 April 2022 |
15 July 2020 to 30 September 2021 | 1 October 2021 to 31 March 2022 |
| Catering services including restaurants and takeaways | 12.5% | 4.5% | 8.5% |
| Hotel or accommodation | 10.5% | 0% | 5.5% |
| Pubs | 6.5% | 1% | 4% |
Affected businesses should ensure that their pricing policies and internal systems and processes are updated for the 1 April 2022 change in VAT rate. Please talk to us if you need any assistance with your VAT affairs.
Our business support specialists in the Hospitality sector remain available to assist you during this difficult time. Please contact Matthew Burge for further information or your usual Beavis Morgan Partner. We will guide you through the tax maze and help you with bespoke solutions to ensure that you and your business are as tax efficient as possible.