The temporary cut on VAT from 20% down to 5% for food, non-alcoholic drinks, accommodation, and entry fees finishes on 30 September 2021. From 1 October 2021, through to 31 March 2022, the rate will change to 12.5%. After 31 March 2022 it will then revert to the standard 20% rate.
For those under the flat rate scheme, the rates will also change for the period from 1 October 2021 to 31 March 2022. The applicable categories under the flat rate scheme are:-
- Catering services, including restaurants and takeaways, at 8.5% (increased from 4.5%).
- Hotels and accommodation at 5.5% (increased from 0%).
- Pubs at 4% (increased from 1%).
In most cases, it will simply be a matter of checking that your software is applying the correct VAT percentage. However, if your VAT periods are not in line with 30 September 2021, this will mean differing rates within the one VAT return. Those on the flat rate scheme, or those not using dedicated accounting software, should take care when preparing their returns.