VAT rate temporarily reduced to 5%

Back in July, the Chancellor announced a temporary reduction in the VAT rate from 20% to 5% from 15 July 2020 to 12 January 2021, for admission to attractions, holiday accommodation and sales of food and non-alcoholic drinks. In this article Linda Skilbeck, Associate Director at Buzzacott, shares her advice on what actions your museum needs to take, to remain VAT compliant and maximise VAT efficiency at a time when cost savings are crucial.

Admission

The temporary VAT reduction for admission to attractions will apply to commercial bodies, and may be relevant to some charity venues that charge VAT. However, if a venue is not for profit and admission is currently exempt under the cultural exemption, the exemption will take precedence and admission charges will not qualify for the reduced rate. HMRC’s guidance states that the 5% rate applies to admission charges received from 15 July 2020 to museums, shows, theatres, circuses, fairs, amusement parks, concerts, zoos, cinemas, exhibitions, and other cultural events and attractions such as planetariums, botanical gardens, studio tours and factory tours.

For more information on:

• Tickets sold in advance
• Mixed supplies
• Membership or admission?
• Online events and performances
• Hospitality
• The Eat Out to Help Out scheme
• Accommodation
• Deposits
• Other consequences of the VAT rate change to consider

Click here to read the full article on the Buzzacott website>>