Further Extension to VAT Rate Cut for Tourism & Hospitality Industries

03 March 2021

Following Rishi Sunak’s budget announcement earlier today the temporary reduced rate of 5% VAT for the Tourism and Hospitality Sectors has been extended for a further 6 months until 30th September 2021.  Furthermore, an interim rate of 12.5% will be introduced for the sector from 1st October 2021 until 31st March 2022. Thereafter the standard rate of VAT will apply again. 

More information on what supplies are included within the temporary reduced rate can be found in our earlier blog below:


As the interim VAT rate from 1st October 2021 is a brand new rate, businesses should ensure that their systems are capable for incorporating the new temporary VAT Rate of 12.5%. 

How can AAB help?

Our Indirect Tax team has experience of previous VAT rate changes and the issues experienced by businesses. Our team will be able to support you the practical aspects of a rate change. 

If you require further information or support regarding the temporary VAT rate change, please contact Suzanne Yule, Indirect Tax Assistant Manager, or your usual AAB contact.

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