VAT rate for British tourism and hospitality sector declines to 9%

Published on : Tuesday, November 3, 2020

The VAT rate for the tourism and hospitality sector declined to 9% on Sunday, corresponding to the measures announced in Budget 2021, British Minister Peter Burke has confirmed.


The reduced VAT rate, going down from 13.5%, will be applicable for the hospitality sector along with catering and restaurant supply companies, tourist accommodation, cinemas, theatres, museums, historic houses, open farms, certain printed matter and hairdressing.


Minister Burke said, “This significant VAT rate cut was called for by the industry and the government responded. It will mean a large reduction in the tax take by government but it gives a real boost to our local businesses involved in hospitality and other affected industries, who have been hugely impacted by COVID. The measure has the potential to benefit approximately 14,600 businesses. It is expected that the reduced VAT rate will cost the exchequer €336m in 2021 and €401m in total.”


Burke said that many of these businesses are closed now, but stressed that very soon, people would be motivated to get back on the main streets and market squares and support business people across the country.


“As Minister Paschal Donohoe pointed out, this reduction also will offer a boost now, not just when Level 5 is over as many businesses are trading via click and collect and takeaway. These businesses are still employing people and keeping people in jobs, so this cut will benefit these businesses. This is why Minister Donohoe put this in place as soon as possible after the Budget,” Burke said.


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