3 Mar 2021
VAT expert reacts to the Spring Budget
I’ve mentioned before that I live in a seaside town in the West Country. So the extension of the VAT cut to 5% for hospitality, accommodation and attractions until the end of September is helpful. But I suspect that hard-pressed nail-bars, hairdressers and similar businesses would have liked similar help.
From 1 October, the VAT rate for hospitality etc. will go up to 12.5% until 31 March 2022. So my local pubs and restaurants will have a new VAT rate to deal with: - the VAT fraction will be 1/9th
Other VAT related measures I’ve spotted:-
The VAT registration and deregistration thresholds will not change until at least 31 March 2024.
Those businesses that deferred payment of VAT on their returns filed between 20 March 2020 and 30 June 2020 must now make arrangements to repay the VAT deferred. The options are:-
- Pay in full by 31 March; or
- Agree an instalment plan
If businesses do neither, by 30 June 2021, a 5% penalty will be levied on amounts outstanding.
Making Tax Digital for VAT to be extended to all VAT registered businesses with effect from 1 April 2022.
The penalties for late submission of VAT returns and late payment of VAT will be revised for VAT periods starting on or after 1 April 2022.
To discuss this further, please contact Steve Chamberlain.