VAT cut to 5 per cent on food, accommodation and attractions
Back to Forum- This topic has 14 replies, 12 voices, and was last updated 12 Jul 2020
at 23:43 by SimonS1.
-
- Author
- Posts
- Skip to last reply Create Topic
-
Mark CaswellKeymasterWill take effect from next Wednesday until January 12, 2021.
The government is also giving diners 50 per cent off meals in participating restaurants during August, dubbed “Eat Out to Help Out”.
8 Jul 2020
at 13:09
esselleParticipant[postquote quote=1003305][/postquote]
Sadly not Harry, as the VAT cut does not cover alcohol.
1 user thanked author for this post.
8 Jul 2020
at 15:16
capetonianmParticipantThe cynic in me says that this is only a matter of giving with one hand now and taking back with the other in the future.
Higher taxes, lower interest rates on NS&I and general savings rates, higher APD just to help travel take off (not!) etc.
8 Jul 2020
at 16:12
flyingcanadianParticipantI am curious to see if Hotel room rates are cut, or will it stay the same and the Hotel just takes the extra 15% in the rate?
1 user thanked author for this post.
9 Jul 2020
at 11:48
ontherunhomeParticipantWith Dynamic pricing it will be impossible to know. Maybe the Travelodge £29.99 room will have to be lower, but I do expect many hotels to just pocket the difference. As a business user, it will put up my costs, as i’ll be able to reclaim less VAT on the headline price. maybe a better idea, would be for overseas visitors, to be able to reclaim VAT on hotels, so it encourages more inbound tourists spending money.
9 Jul 2020
at 12:10
ASK1945ParticipantReducing the VAT has to be good news for consumers, although in due course the tab will need to be picked up by tax payers, in one way or another.
So, why the debate about prices? Don’t market forces come into play? Unless anti-competitive moves by agreements between hotel groups to keep the difference happens – surely being watched for by the CMA – I will be no worse off if some hotels decide to keep the VAT reduction to stay in business. If I don’t like that I will book a different hotel.
9 Jul 2020
at 12:50
WilliamReadParticipantVAT was introduced at the behest of the EU several decades ago; it was attacked at the time, as bureaucratic, costly to administer etc. Now the UK is out of the EU, the opportunity could be taken to review whether VAT is fit for purpose in the 2020s, and examine alternatives.
9 Jul 2020
at 13:31
esselleParticipant[postquote quote=1003451][/postquote]
It’s an interesting idea and probably one which will be looked at as part of the exit plan, albeit whatever you call it (it was called Purchase Tax before 1973) it generates a number which forms part of the income the exchequer will have baked into its plans.
9 Jul 2020
at 13:42
LondonAndy70Participant[postquote quote=1003451][/postquote]
Although VAT is one of the few taxes that is levied at the point of consumption, and is more difficult (although not impossible) for most people to avoid / evade. For that reason I think it serves a useful purpose. Given many essentials are at 0% or low rates, it means that those who can afford to consume non-essential items pay more, which I guess is fair.
3 users thanked author for this post.
11 Jul 2020
at 08:50
LuganoPirateParticipant[postquote quote=1003451][/postquote]
I’m old enough to remember Purchase Tax, but not old enough to recall how it worked. Can anyone enlighten me and was it better than the now VAT??
Correct me if I’m wrong, but I think many countries have always applied a much lower rate of VAT on hotel accommodation.
12 Jul 2020
at 10:42
openflyParticipantThis is not a 15% price reduction, it’s a 15% VAT cut. I understand that this just means that the merchants only have to submit 5% in VAT, keeping the rest. Should a merchant wish to pass this on by means of price reduction, then all well and good. But it is not mandatory.
12 Jul 2020
at 21:25 -
AuthorPosts