Change in Hospitality VAT rate April 2022

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From April 2022 the VAT rate for hospitality and accommodation businesses will increase from 12.5% to 20%.

During Covid-19, to assist businesses in the hospitality and accommodation sector the VAT rate was reduced to 5% in July 2020. It was subsequently increased to 12.5% in 1 October 2021.

Things to consider: 

  • If you’re using any kind of till, or online booking system, this will need to be updated ahead of time for the VAT rate changes
  • Everything that is currently at the reduced hospitality rate of 12.5% will need to be changed to 20%
  • Top tip: if you had a list of prices that had to change to 12.5% from 5% last October, use this, and update for any new products or services
  • Check if your online system providers, or till providers do bulk updates for you
  • If you are using an accountancy software package and you have created reconciliation rules in the banking screen, make sure these are updated to take into effect the change of rate to 20%
  • Before submitting your next VAT return check that the VAT rates from 1 April 2022 for hospitality and hotels are calculated at 20% (if the service is VATable). As usual, only claim VAT if you have a valid VAT receipt

Find out more on the HMRC website.

If you need any support or assistance with the VAT rate change please contact a member of the Ellis & Co team on 01244 343504 or email info@ellis-uk.com