"These changes as an urgent response to the pandemic to support businesses affected by closures and social distancing", Government source reveals.
Takeaways and days out should be less expensive from today as new VAT slashed come across the hospitality sector. Amusement park, theatre tickets and even zoos will earn from VAT cut as part of a £4.1billion plan to help tourism and get the public spending again.
VAT slashed from 20% to 5%
Chancellor Rishi Sunak declared that value added tax will drop from 20% to 5% for six months from Wednesday.
He added that this step can “get the sectors moving and protect jobs” as the Government approaches the end of the furlough scheme in October. The cut will start until January 12, 2021 and will embrace takeaways and meals out as well as hotel, B&B and campsite stays. However, the reduction will apply where businesses decides to transmit the discount.
“These changes are being brought in as an urgent response to the Covid pandemic to support businesses severely affected by forced closures and social distancing measures,” a Government spokesman stated.
For those who still don’t get what VAT means, it is the value added tax. It is the tax you are obliged to pay when you buy something. It’s set at 20%, while a vat slashed of 5% applies to some issues like children’s car seats and ethical energy. Starting today, the Government will slash Vat on drink, food and even staycations to restart the economy and give support to business.
Shops and restaurants have the possibility to charge less tax. There are effects on the food purchases and non-alcoholic beverages sold for on-premises consumption such as in cafes, restaurants and pubs, hot takeaway food. But also sleeping accommodations in hotels or similar establishments. Admissions to the following attractions comprehended in the VAT cut are theaters, circuses, fairs, amusement parks. But also concerts, museums, zoos, cinemas, exhibitions and similar cultural events and facilities.
How to save some money
“For a pub meal costing £45 without alcohol, a couple could expect to save £5.62. While a £54.50 one-night stay at a hotel in a family room would see a saving of £6.81,” Daniel Lyons, the head of tax policy at accountants Deloitte, explained. “A family ticket to a theme park or zoo costing £144 could see a saving of nearly £18“, he added. However this savings can apply if business accept to pass the cut on.
David Scott, CEO of The Suffolk Hotel Folk, assures huge savings for guests. “We will be passing the 15 per cent VAT reduction directly on to our staying and dining guests. In the hope it will encourage them to book with us. We will also be looking at participating in the 50 percent off ‘Eat Out to Help Out’ scheme for people dining at our hotels Monday to Wednesday during August”, he said.