The Chancellor has today announced the 2021 Budget and there is one particular announcement that will affect many of our NHS Clients and one other included for completeness.

Hospitality & Tourism Sector VAT Reduction

The Chancellor has announced the continuation of support to businesses in the hospitality sector, he is maintaining a VAT rate cut from 20% to 5% on supplies of food and non-alcoholic beverages from restaurants, cafes, pubs, bars and similar premises for a period of six months from the 01 April 2021 to 30 September 2021. This will be immediately followed by a further six month period where the VAT rate will be held at 12.5%, only returning to the standard-rate of 20% in April 2022.

It is worth remembering that this was initially a short-term measure to support the sector, but will now affect a period spanning across several financial years and affects a larger sum of money. It is therefore more important than ever that the NHS ensures that VAT is correctly accounted for and is not over/under stated in the different periods of VAT rates.  

BBVAT are pleased to offer a full range of services to the NHS, where you may require any assistance in completing any of the following, please contact your NHS VAT Specialist directly or via our helpline here.

• Completing a retrospective review to ensure the correct VAT has been accounted for over the last four-years; and/or
• Pro-actively coding all items to ensure the correct VAT liabilities are applied to items sold moving-forwards and beyond April 2022; and/or
• Support in ascertaining whether the supplies you make may be affected by the reduced rate for tourism related services

VAT Registration Threshold

The VAT registration threshold will remain unchanged at £85,000 up to and including 2023/24; this is a welcome announcement which will provide certainty for many small business.