Temporary Reduced VAT Rate
A new temporary reduced rate of VAT of 5% was announced on 8 July 2020 for admission to certain attractions. This temporary rate will apply from 15 July 2020 to 12 January 2021.
Who this applies to?
This applies to businesses that make supplies of admissions that are currently taxable at the standard rate. This includes:
- amusement parks
- similar cultural events and facilities
Examples of where the reduced rate may apply could be attractions such as:
- a planetarium
- botanical gardens
- studio tours
- factory tours
The temporary reduced rate does not apply to admission to sporting events.
This temporary reduced rate only applies to admission fees.
However, where goods are part of the admission fee and are incidental to the main supply, the whole supply is eligible for the temporary reduced rate.
Supplies which include other incidental supplies
If the main supply is the admission fee to one of the attractions listed above and any other supplies included are incidental, the whole supply will be eligible for the temporary reduced rate. It is the responsibility of each taxpayer to demonstrate that its supplies are eligible for the temporary reduced rate.
Example 1 :
The supply of admission to a tour of a brewery or distillery includes an incidental supply of food and drink as part of the tour. This will be a single supply and will benefit from the temporary reduced rate. However, if the provision of food and drink is the main purpose of the supply, it would not qualify.
The supply of admission to an event such as an exhibition that includes an incidental supply of a brochure or activity book, would be a single reduced rated supply.
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