Winter Economy – VAT announcements
Reduced rate of VAT for hospitality
The temporary reduction in the rate of VAT applying to certain supplies in the hospitality sector was due to come to an end on 12 January 2021. The rate cut is now being extended until 31 March 2021.
Deferral of VAT payments
The VAT due on returns covering the periods from March 2020 to June 2020 could automatically be deferred provided it was paid by 31 March 2021.
VAT registered entities did not need to notify HMRC, or take any action, they could simply not pay it provided it was paid off either in instalments or as a lump sum by March 2021.
It has now been announced that this deferred VAT can be paid off in 11 equal instalments for the period through to March 2022. All entities that deferred paying their VAT are eligible, but this will be an opt in scheme. Businesses will therefore have to contact HMRC before they can avail themselves of this measure.
Details of the opt in procedure will be announced in early 2021.
Please contact Phil Salmon, another member of the VAT team, or your usual haysmacintyre contact for further details and assistance in relation to the above.