Hospitality and tourism VAT rate change from 1st April 2022

Temporary reduced VAT rates for certain supplies relating to hospitality, hotel and holiday accommodation, and admission to certain attractions are set to end, reverting back to 20% from 1st April 2022.

In the wake of the 2020 Coronavirus pandemic, a 5% VAT rate was introduced for certain purchases in the hospitality industry, in an effort to support businesses affected by forced closures and social distancing measures.

In the Budget 2021, the Chancellor announced that the 5% reduced rate would be extended again until 30 September 2021 and further, that from 1 October 2021 until 31 March 2022, the temporarily reduced rate of 5% VAT will change to the new reduced rate of VAT of 12.5%. 

It is sometimes hard to believe that 2 years have passed since the beginning of the Covid-19 pandemic, and with the withdrawal of all restrictions, there will now also be the reinstatement of the 20% VAT rate for all supplies which had been under the temporary reduced rate.

This change will take effect from 1st April 2022.

In MyExpenses, you can easily change the default VAT rate on each of the affected categories, in the administration settings, ensuring the correct VAT treatment on your company’s expense claims. Visit our help page for guidance on this.

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