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New Hospitality VAT rate

Sep 22

From 1 October 2021, the government will introduce a new reduced rate of VAT for hospitality, holiday accommodation and attractions.


The government initially introduced a reduced rate of VAT back in July 2020, with a temporary 5% reduction, and was intended to last until January 2021. This was then subsequently extended until March 2021. As part of the 2021 Budget, it was confirmed that the reduced rate would be further extended, this time until 30 September 2021.

What is changing

The new rate of 12.5% will be introduced on 1 October 2021 and will remain in place until 31 March 2022 to support in the transition back to the standard rate of VAT (20%).


Find out how these new VAT schemes may affect your business and visit our Sage business legislation hub. Our on-demand videos and help articles are designed to support you through this change.

Need help?

Visit for support, including links to the Sage Knowledgebase, Sage University, and more.

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