Potential Saving Of VAT on Holidays In The UK
VAT reduction – Are you planning to spend your holiday in the UK? It will be really exciting to travel to the UK to watch various amazing places. Also, you will be a great advantage now in terms of the cost incurred in the traveling. It is mainly due to the reduction of the Value Added Tax [VAT] on Holiday traveling in the UK. The recent budget has cut down on the VAT charges to much extent that can help to save the spending tremendously.
Why the potential of saving VAT is better now?
As per the mini-budget of the UK announced recently, the government has reduced the chargeable VAT to a great extent in the leisure and hospitality industries. It includes the traveling cost. Earlier, the rate was around 20% and now it is reduced to 5% on the sales here. It has made a nice saving of VAT on holidays.
The categories on which the VAT reduction is applied are:
- Hotel accommodation in the holidays
- Sale of drink and food in holidays
- Admissions to the attractions on holidays
Irrespective of the structure of the holidays, the appropriate amount of the VAT is applicable to the holiday. A reasonable and fair valuation of the cost during the holidays is made by considering the proper applicable VAT. A proper accounting of the cost involved in the holidays can be made to enjoy the benefits of the reduced tax.
What are the important points of HMRC for VAT reduction?
- VAT to be paid for the holidays’ caravans, holiday accommodation, and camping facilities.
- VAT reduction on a temporary basis for the holiday accommodation, hospitality, and different other attractions.
- Attractions can get the reduction for the VAT on a temporary basis easily.
- Margin schemes for the tour operators for new updated (709/5) VAT notice.
- Catering takeaway food in the holiday in the UK
The effort to boost UK travels industry:
In the last year world has experienced a setback in different sectors due to pandemics. The travel industry was one of the most adversely affected sectors due to it, where traveling becomes very difficult. The UK was no exception to this, so the government has reduced the VAT on spending holidays here. It is a step to boost the UK travel industry again. Apart from that, UK has also taken other steps for promoting traveling where few countries were exempted from quarantine. Elimination on the other rates while traveling.
If you are planning for going to the UK then you can reap the benefit of cost reduction due to a decrease in VAT. You need an expert accountant to manage the cost of the traveling as per the VAT reduction guidelines.
Meru Accounting can help you manage the cost of the travel in the UK with a new reduced tax easily. Meru Accounting is popular for providing excellent accounting-related services for the clients across the world.
