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VAT Rate Reduced - Get Your Systems Ready

Yesterday, the hospitality and tourism industries received some welcome news, with temporary measures announced by the government to stimulate consumer demand and get businesses impacted by the pandemic back up and running again.

What’s changing?

  • VAT rate cut VAT will be reduced for hospitality and tourism businesses from 20% to 5% until January next year. This will start from Wednesday next week. The cut applies to food and non-alcoholic drinks as well as accommodation and admission to attractions.

  • Discount for diners A new ‘Eat Out to Help Out’ scheme will offer 50% discounts of up to £10 a head for all diners in participating restaurants, cafes and pubs on Mondays, Tuesdays and Wednesdays throughout August. There is no limit on the number of times the discount can be used but it will only apply to non-alcoholic drinks. It can also only be used on dine-in meals and not takeaways. The Chancellor has said a website will be launched next Monday, through which businesses can register to take part in the scheme. He promised that businesses will be fully reimbursed for the discounts and will receive the funds within five working days.

How we can help

To get your systems ready for the VAT reduction, we’ve created a simple guide to walk you through the changes. To access your copy, contact our dedicated tax team by emailing


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