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.