The government is extending the temporary reduced rate of VAT (5%) from 12 January to 31 March 2021.

This will continue to apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises, supplies of accommodation and admission to attractions across the UK.

VAT deferral

Over half a million businesses deferred VAT payments, which were due in March to June 2020, with these payments becoming due at the end of March 2021.

The government has now announced the option for such businesses to spread their payments over the financial year 2021/22.

Businesses will be able to choose to make 11 equal instalments over 2021/22.

All businesses which took advantage of the VAT deferral can use the spreading scheme. Businesses will need to opt in and HMRC will put in place an opt-in process in early 2021.

How we can help

Further technical details of the schemes will be published by the government but no date has been announced as to when.

Please be assured we will be here to provide you with support and please contact us if you have any queries on the measures announced.