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VAT cut: what is hospitality and tourism?

Is there a definition available?

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Given the chancellor's announcement, has anybody seen a definition of which businesses the temporary cut relates to?

Without a precise definition, there'll some cases it won't be entirely clear whether a business is considered hospitality/tourism, such as accommodation and visitor sports facilities... 

Replies (30)

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By acceje
08th Jul 2020 15:01

From the CP261 "Plan for Jobs" published online
2.31 Temporary VAT cut for food and non-alcoholic drinks – From 15 July 2020 to
12 January 2021, to support businesses and jobs in the hospitality sector, the reduced (5%) rate of VAT will apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises across the UK. Further guidance on the scope of this relief will be published by HMRC in the coming days.
2.32 Temporary VAT cut for accommodation and attractions – From 15 July 2020 to
12 January 2021, to support businesses and jobs, the reduced (5%) rate of VAT will apply to supplies of accommodation and admission to attractions across the UK. Further guidance on the scope of this relief will be published by HMRC in the coming days.

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Replying to acceje:
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By the_drookit_dug
08th Jul 2020 15:20

Great, thanks!

So limited help to pubs then if it only applies to non-alcoholic drinks...

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By Pitt01
08th Jul 2020 15:12

Does anyone think that this will relate to takeaway outlets?

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Replying to Pitt01:
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By CS777
08th Jul 2020 15:24

What do you think?

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Replying to CS777:
Stepurhan
By stepurhan
08th Jul 2020 16:29

Well the document quoted above says "and similar premises" after listing only sit-down venues.

So does that mean that only sit-down venues are covered, or are takeaways "similar premises" because they also serve food. For that matter I know of some pubs and restaurants that also do takeaway. Will they have to distinguish between meals eaten in and taken away.

I could see the argument going either way on intention. Have people avoided takeaways because of the need for contact with delivery people, or used them more because of being locked down? Are they an affected sector that needs a boost?

Another case of woolly definitions that we have to make our own judgements on. "Fun!"

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By ireallyshouldknowthisbut
08th Jul 2020 15:38

I am so glad I don't have any pubs or restaurant clients.

its going to be a nightmare reprogramming the tills for VAT/not VAT items.

There is bound to be a case of Restaurant Chain vs HMRC over beer battered cod or low alcohol drinks.

O what larks expense claims are going to be for 6 months when the hotel receipt says 20% but the rate charged is actually 7.8% as they had a bottle of wine with dinner and the rest was at 5%.

And what will the flat rate of VAT be? So many issues in one small announcement.

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Replying to ireallyshouldknowthisbut:
blue sheep
By NH
08th Jul 2020 15:44

Yep, luckily we don't have many of these clients but as you say we have lots of clients that have these costs, I can see the bookkeeping being difficult

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Replying to ireallyshouldknowthisbut:
By Tim Vane
08th Jul 2020 16:11

ireallyshouldknowthisbut wrote:

I am so glad I don't have any pubs or restaurant clients.

its going to be a nightmare reprogramming the tills for VAT/not VAT items.

A few years ago maybe but nowadays it's largely painless for the vast majority, since most tills require regular software updates anyway and often this is done remotely by the company that leases the tills. Other systems are quickly upgraded via apps. Even the older manual systems will have a simple menu system to update item groups with relevant rates.

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Replying to ireallyshouldknowthisbut:
Caroline
By accountantccole
08th Jul 2020 16:20

Pub client currently tracks "sales"
Will now need to track:
- EOTHO food sales
- Food sales in excess of EOTHO
- non alcoholic drinks
- alcoholic drinks
Debating if a customer could order main course, pay and then coffee and cake as a separate transaction and get two lots of 50%/£10. I am sure there will be something to stop it but how the heck they would police that sort of scenario?

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Replying to accountantccole:
By ireallyshouldknowthisbut
08th Jul 2020 16:50

@accountantcole,

that is is how many small business work who have all their T/o std rated.

You don't care about the splits as you have never had to worry about it.

Wait until you get down to take away with a couple of 'eat in' tables now being cheaper than hot carry out with the half price meal voucher. The possibilities are endless. How about take away "meal deals" from places like Boots ro Tescos Extra's?

You have the perfect storm of phenomenal complexity for essentially buttons for the little guy, but big enough to worry about for the high street retailers.

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Replying to accountantccole:
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By tcatt31489
10th Jul 2020 12:17

If customers cannot split a meal into two transactions to maximise the 50%/£10 subsidy the answer will be to have a main course in one establishment and the coffee and desert in another bar/cafe nearby. (obviously easier in towns and cities rather than the country)

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Replying to tcatt31489:
RLI
By lionofludesch
10th Jul 2020 12:50

tcatt31489 wrote:

If customers cannot split a meal into two transactions to maximise the 50%/£10 subsidy the answer will be to have a main course in one establishment and the coffee and desert in another bar/cafe nearby. (obviously easier in towns and cities rather than the country)

Aye. Well.

We're just back from calling in for a coffee. We had to queue to get in. If you think I'm going to queue at different establishments for each course, think again. It won't be worth the effort.

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By the_drookit_dug
08th Jul 2020 16:37

So is admission to a football ground 'admission to an attraction'? What about golf green fees?

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chips_at_mattersey
By Les Howard
08th Jul 2020 17:20

Legislation will be published very soon with the details.
Takeaways and other outlets will have to re-programme their tills next week, and then again next January.

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Replying to leshoward:
RLI
By lionofludesch
08th Jul 2020 17:36

leshoward wrote:

Takeaways and other outlets will have to re-programme their tills next week, and then again next January.

Is that inside information, Les ? Takeaways are definitely in ?

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Replying to lionofludesch:
By ireallyshouldknowthisbut
08th Jul 2020 17:43

@lion I have assumed 'yes' as it says "purchased from restaurants"

As opposed to "consumed in restaurants"

Albeit given your typical curry gives you a 10-20% discount for collection and eat at home, your half priced curry to eat in will still be cheaper if both are 5%. So long as you don't buy any beer and consume it Monday to Weds night.

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Replying to lionofludesch:
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By alfredpennypinch
08th Jul 2020 18:09

lionofludesch wrote:

leshoward wrote:
Takeaways and other outlets will have to re-programme their tills next week, and then again next January.

Is that inside information, Les ? Takeaways are definitely in ?

Sunak specifically mentioned hot takeaway food in his speech.

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Replying to alfredpennypinch:
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By davisut
08th Jul 2020 23:38

But I think he said hot takeaway food from restaurants and pubs. We will have to wait for the detail.

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By Paul Crowley
08th Jul 2020 18:37

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By Paul Crowley
08th Jul 2020 18:28
Why the Flip could he not just give them money?
Loads more wasted time for all concerned to get mere crumbs.

No apologies for reposting from similar thread

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Replying to Paul Crowley:
blue sheep
By NH
08th Jul 2020 18:54

Because politicians and those that advise them in the treasury have absolutely no idea how the real world works

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7om
By Tom 7000
10th Jul 2020 09:41

The wedding planner wants to know does he only pay 5%
The rugby club wants to know do they pay 5%
The local chippy says do I charge 5%.

They asked me withing 10 minutes of the chancellors speech.

They assume I have been told the exact really complicated rules in advance and I can simply translate this down to an answer of less than 20 words they can understand.

Is that the sound of chaos approaching?

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Replying to the_drookit_dug:
blue sheep
By NH
10th Jul 2020 10:03

So you are saying the local chippy does not supply takeaway hot food?

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Replying to NH:
7om
By Tom 7000
10th Jul 2020 10:17

the rugby clubs sit down meal before the game
the wedding palnners supply of food....

Are these mixed supplies...so now I have to think about then rules...

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Replying to Tom 7000:
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By North East Accountant
10th Jul 2020 11:39

Chaos indeed with the humble accountant/book keeper sorting out the mess... again.

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Replying to North East Accountant:
By 0098087
10th Jul 2020 11:41

Already one got one publican saying the cost of reprogramming the tills for the lower rate for soft drinks..he can't be bothered..

They aren't doing food at the moment either...

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By geoffmw1
10th Jul 2020 16:05

If the idea is to help the affected industry to recover losses what incentive is there to reduce prices. However I feel sure that consumers are expecting price reductions since most of them simply don't understand VAT

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Replying to geoffmw1:
RLI
By lionofludesch
10th Jul 2020 16:15

geoffmw1 wrote:

If the idea is to help the affected industry to recover losses what incentive is there to reduce prices. However I feel sure that consumers are expecting price reductions since most of them simply don't understand VAT

Well, even if the trader did pass on the full reduction to the customer, increased footfall and turnover.

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By Rich-the-bean-counter
10th Jul 2020 18:01

I can't find clarification, and after an hour or so of reading the same notices and links, I feel like giving up:

If a customer buys a bottle of coke to sit in and drink it on the premises, the rate to charge is 5%. If that customer has the same bottle to go, he has to pay more at the usual standard rating of 20%?

Its seems absurd...

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Replying to Rich-the-bean-counter:
Psycho
By Wilson Philips
10th Jul 2020 18:50

No more absurd than someone paying a restaurant/cafe price for a bottle of Coke to takeaway rather than the shop price.

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