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bigduckontax
bigduckontax, Accountant
Category: Tax
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My company provides accommodation, transport and guided

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Hello, my company provides accommodation, transport and guided activities sold as a package in the UK. Please can anyone tell me what current rate of VAT I should apply? is it the temporary reduced 5% VAT because we operate in the hospitality and tourism sector? Thanks
JA: When was the property or asset sold?
Customer: Hi its a service
JA: Is there anything else the Accountant should know before I connect you? Rest assured that they'll be able to help you.
Customer: no

The current rate of VAT is 20%, unchanged for years. Post Brexit though sales outside the UK are exports, zero rated supplies.

Customer: replied 16 days ago.
Thanks for this. I thought the VAT cut for hospitality, accommodation and tourism would apply until 310 Sept 2021
https://www.avalara.com/vatlive/en/vat-news/uk-cuts-hospitality-vat-to-5-till-12-jan-2021.html,
I'm selling the package to people in Germany but they will be coming to Scotland to enjoy the service so do I still need to charge them VAT? Thanks

As announced at budget 2021, the government will be legislating to:

  • extend the temporary reduced rate of VAT of 5% until 30 September 2021
  • prepare for a new rate of 12.5% from 1 October 2021 to 31 March 2022

The supplies to which the temporary reduced rates will apply remain the same.

Customer: replied 16 days ago.
Thank you for confirming that. I'm unclear if my supplies qualify. I will be selling accommodation and a guided deer stalking experience which includes transport. Do you think these supplies have the temporary reduced rate or do you know where I would be able to get further advice on this?

You need to establish that you’re providing accommodation in a hotel, inn, boarding house or similar establishment. The reduced value rule does not apply to holiday accommodation, There is a danger here that your activities will not embract these parameters and in that case the 20 rate would apply.

Customer: replied 16 days ago.
OK so I'll be providing accommodation in a boarding house as meals will be provided. Based on your comments I'm thinking that I will need to Invoice the customers with itemised supplies rather than a package i.e. Accommodation and food £XXX + 5% VAT
Guided Deer Stalking and Transport £XXX + 20% VAT
Does that look appropriate?
Thanks

Yes, indeed, what a palaver, bet you wish you hadn't started the whole caper!

bigduckontax and other Tax Specialists are ready to help you
Customer: replied 16 days ago.
haha well the VAT is certainly troubling me . Thanks very much for your help and advice

Delighted to have been of assistance.