Covid-safety guidance and extension of VAT reduced rate details

Please find below a number of updates regarding Covid-safety guidance, and extension of VAT reduced rate.

Updated Covid-safety guidance for shops

The Working Safely guidance for Shops and Branches has been updated to remove the guidance that items that have been returned, donated, or brought in for repair should be stored in a container or separate room for 48 hours or cleaned before display.  You can find the guidance and ‘what’s changed’ here: https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19/shops-and-branches

Extension of VAT reduced rate details

The Government has updated their guidance confirming the extension of the VAT reduced rate for tourism and hospitality from 12 January to 31 March 2021: https://www.gov.uk/guidance/vat-reduced-rate-for-hospitality-holiday-accommodation-and-attractions

  • Hospitality: If you supply food and non-alcoholic beverages for consumption on your premises, for example, a restaurant, café or pub, you’re currently required to charge VAT at the standard rate of 20%. However, when you make these supplies between 15 July 2020 and 31 March 2021 you will only need to charge 5%.  You will also be able to charge the reduced rate of VAT on your supplies of hot takeaway food and hot takeaway non-alcoholic drinks.
  • Hotel & Holiday Accommodation: You will also benefit from the temporary reduced rate if you: supply sleeping accommodation in a hotel or similar establishment; make certain supplies of holiday accommodation; charge fees for caravan pitches and associated facilities; charge fees for tent pitches or camping facilities
  • Admission to certain attractions: If you charge a fee for admission to certain attractions where the supplies are currently standard rated, you will only need to charge the reduced rate of VAT between 15 July 2020 and 31 March 2021.
  • The Flat Rate Scheme: If you are a small business and use the use the Flat Rate Scheme to simplify your VAT calculations you should be aware that certain percentages have been reduced in line with the introduction of the temporary reduced rate of VAT.  More information can be found in VAT Flat Rate Scheme. https://www.gov.uk/vat-flat-rate-scheme
  • The Tour Operators Margin Scheme: If you are a business that buys in and resells travel, accommodation and certain other services, and you act in your own name, you may operate the Tour Operators Margin Scheme to simplify your calculations. https://www.gov.uk/guidance/vat-guide-notice-700#changes-in-tax-rates-and-liability

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