Is the UK VAT rate changing?
The initial reduced rate of 5% has had effect from 15 July 2020. The subsequent 12.5% reduced rate will have effect from 1 October 2021 until 31 March 2022. At this point the standard rate will apply.
Is VAT increasing in 2021?
The reduced rate of 5% VAT will continue to apply until 30 September 2021, before increasing to a transitional rate of 12.5% and finally returning to 20% from 1 April 2022.
Does zero rating go on VAT return?
Zero-rated means that the goods are still VAT -taxable but the rate of VAT you must charge your customers is 0%. You still have to record them in your VAT accounts and report them on your VAT Return. Examples include: books and newspapers.
What VAT rates are changing?
The Chancellor announced at Budget 2021 that the temporary reduced rate of 5% will be extended to 30 September 2021. From 1 October 2021 the reduced rate for these supplies will be replaced by the introduction of a new reduced rate of VAT of 12.5% which will remain in effect until 31 March 2022.
Is hospitality still 5% VAT?
The UK government has confirmed that the temporary reduced rate of 5% VAT for the tourism and hospitality sector will be extended to until 30 September 2021.
What happens if I make a mistake on my VAT return?
HMRC may charge you penalties and interest if an error is due to careless or dishonest behaviour. You should tell HMRC about careless errors separately in writing, as well as adjusting your current VAT Return. This may lead to a reduction in the penalty.
Will VAT be reduced after Covid?
Does the temporary VAT rate cut affect the VAT Flat Rate Scheme? Yes, it does. The temporary changes mean that some rates covered by the VAT Flat Rate Scheme (FRS) have changed. This enables VAT FRS users to benefit from the temporary reduction in the standard VAT rate as well.
What is the new VAT rate for hospitality?
In its Summer Economic Statement on 8 July 2020, the government announced a number of VAT measures including a temporary reduction to the Standard Rate of VAT from 20% to 5% for the hospitality sector.
When does the VAT zero rate go into effect?
This has enabled the UK to review the VAT treatment of these supplies. The temporary VAT zero rate will apply to all supplies of PPE which are made between 1 May and 31 October 2020 and which are recommended for use by Public Health England.
Do you have to charge VAT on zero rated goods?
Zero-rated means that the goods are still VAT-taxable but the rate of VAT you must charge your customers is 0%. You still have to record them in your VAT accounts and report them on your VAT Return.
When did VAT go up to 20% in the UK?
Zero-rated goods and services, eg most food and children’s clothes. The standard rate of VAT increased to 20% on 4 January 2011 (from 17.5%). Some things are exempt from VAT, eg postage stamps, financial and property transactions.
When does VAT go to zero for PPE?
The Government has announced the introduction of a temporary VAT zero rate on the supply of personal protective equipment (PPE), recommended for use in connection with protection from infection with Coronavirus. This took effect from 1 May 2020 and applies to all qualifying supplies until its expiry on 31 October 2020.