VAT Rates Set To Increase For The Hospitality and Leisure Industry From October 2021

VAT rates for businesses in the hospitality sector, set to change from the 1st October 2021.

Back in July 2020 the government introduced a new 5% VAT rate for hospitality businesses to help them bounce back following their closure due to the global pandemic. The original 5% VAT reduction was initially set to last until January 2021, however due to a third UK-wide lockdown and the closure of many hopsitality businesses this was extended until March 21.


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As part of the UK budget announced in March 2021, the Chancellor confirmed that the 5% reduced VAT rate would be extended further until the 30th September 2021.

So what’s changing from October 2021?

From the 1st October 2021 the government will introduce a new slightly higher, but still reduced VAT rate for hospitality, holiday accommodation and attractions. The new rate will be set at 12.5% and will remain in place until the 31st March 2022 to help support businesses as they transition back to a standard rate of 20% VAT.

If you are unsure of what action you need to take to support these VAT transitions then please contact your account manager or our support team. Help and resources will be avaliable to ensure your business can transition to the new increased rate easily.

Contact 0800 0433 106