Temporarily reduced VAT rate to 5%

The UK government has announced on 8 July 2020 to temporarily reduced VAT rate to 5%, from the standard rate of 20% to boost the UK economy during the COVID-19 pandemic.

The temporary 5% reduced VAT rate will come into effect for transactions occurred between 15 July 2020 and 12 January 2021.

if you are a VAT registered company and in business in the following sectors then you would charge 5% VAT to your customers from 15 July 2020, instead of the 20% VAT.

For example, say your usual price for a plate of stir fried noodles is £9 plus VAT. Currently, your selling price to your customers would be £10.80 inclusive of 20% VAT (£9+20% VAT). From 15 July 2020, your selling price will fall to £9.45 (£9+5% VAT). Your customer will save £1.35 and you will lose nothing except for adjusting your VAT calculation.

Hospitality sector

  • Restaurants
  • Pubs,
  • Cafes,
  • Catering and takeaways.

Hotels and holiday accommodation

  • Hotels
  • Camping sites
  • Hostels
  • Bed and Breakfast
  • Caravan sites

Attractions

  • Shows
  • Theatres
  • Circuses
  • Fairs
  • Amusement parks
  • Concerts
  • Museums
  • Zoos
  • Cinemas
  • Exhibitions
  • similar cultural events and facilities

Read the guidance on temporary 5% reduced VAT rate here.

This temporarily reduced VAT rate to 5% will encourage the public to visit attractions with their kids and eat out during this pandemic. Of course, everyone must follow the social distancing rules.

Companies House filings during COVID-19 pandemic

Companies House also step up to support UK businesses during COVID-19 pandemic. They will automatically extend your company’s filing deadline. This would help your business if it is severely affected by the COVID-19 outbreak and help you to avoid a late filing penalty. You do not need to do anything. You just need to go to Companies House website to check your new filing deadline.

On the same note, your confirmation statement filing deadline will also be extended. You would have 6 weeks to file your confirmation statement. Likewise, for the events driven filings, you will have 42 days (6 weeks) to notify Companies House instead of the usual 14 days filing deadline.

In addition, Companies House also created an interim paperless filing service to accept documents which would normally require a live signature.

During this pandemic, you are encouraged to submit your documents online to Companies House. You can use the webfiling service to file the following documents to Companies House.

To file online, you would require your company’s authentication code. The authentication code is the electronic equivalent of your company’s director(s) signatures. Keep safe your authentication code.

If you require help with your company’s filings, contact Our accountants. They will be more than happy to assist you.

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