Q&A: Which VAT rate to use in the hospitality sector
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Q. My business operates in the hospitality sector. I’m preparing our VAT return for the quarter ended 30 November 2021 and am unsure about which rate to use, as the temporary rate of 5% changed to 12.5% on 1 October. Should I have applied the new rate as it was changed part-way through the quarter?
A: No, there was no pre-emptive legislation regarding this, so the usual tax point rules apply. Anything that that had a tax point on or before 30 September should have been subject to 5%. As long as you have correctly applied the 12.5% rate from 1 October onward, you will be fine.
Don't forget that the rate will revert to 20% from 1 April 2022.
About the Author
Paul Newbold
Partner
After qualifying with KPMG where he gained significant audit experience, Paul joined Torgersens in 1991 and became the firm’s audit partner in 2000.
Paul employs his broad range of financial skills to provide commercial and accounting advice to a range of owner-managed businesses in the independent retail, education and professional services sectors. He also has extensive experience dealing with charities, Registered Social Landlords and not-for-profit organisations and co-operatives.
Outside of work, Paul likes to visit Eastern France and South-West German and read novels by David Morrell, Michael Blake and Harper Lee. He also likes watching films, his favourite is The Shawshank Redemption.
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