Holiday accom 5% - what does 'apply' mean?

Date of booking? Date of holiday? Date of payment?

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VAT notice 709/3 section 1 "...temporary 5% reduced rate of VAT that will apply between 15 July 2020 and 12 January 2021". What does 'apply' mean? Date of booking, date of holiday or date of payment? When I saw this announced on TV I understood it would apply to holiday accomodation occupied from 15 July. VAT Notice 700 section 14 'You must normally account for VAT in the tax period in which the tax point occurs, at the rate in force at that time.' The SI didn't come into force until 15 July which means all payments received before 15 July are standard rated. The main holiday season finishes end of August. Because deposits and balances are paid in advance, by 15 July most payments have been made for the main 2020 holiday season (what little of it there was). Which means the 5% rate will only apply to the relatively small number of payments made for the remainder of the year. So the VAT reduction isn't much of a VAT reduction after all. Or have I missed something?

If payment is made via an agent, I assume the date the agent received payment is the date that triggers the VAT rate.

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chips_at_mattersey
By Les Howard
22nd Aug 2020 21:30

Usual tax point rules apply. So, a holiday paid before 12 Jan 2021 will be eligible for the reduced rate. (Use it in your marketing!)

Thanks (1)
RLI
By lionofludesch
24th Aug 2020 06:27

Agree. Maybe it won't be much use in 2020 but it'll apply to a lot of 2021 holidays.

If we're allowed to go anywhere, obviously.

Thanks (1)
Morph
By kevinringer
24th Aug 2020 14:29

VAT notice 700:

'30.7.4 Using the special provisions when the tax rate or liability goes down
When the amount of VAT to be charged on the supply goes down, you can charge tax at the new rate on goods removed or services performed after the date of the change, even though payment has been received or a VAT invoice issued before that date.'

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