Temporary reduced rate of VAT set to change

What is changing?

Whilst there will be a change to the temporary reduced rate from the end of this month, it is not due to cease altogether. In March 2021, the Chancellor confirmed that the temporary reduced rate for catering, holiday accommodation and admissions to attractions would be extended by a further year to the end of March 2022 – however this will be in two tranches:

  • Extend the period covered by the reduced rate of VAT at 5% until 30th September 2021.
  • Increase the temporary reduced rate to 12.5% from 1st October 2021 to 31st March 2022.
  • Supplies are then due to revert to the standard rate of 20% from 1st April 2022.

What do I need to do now?

If this affects you, you will need to prepare for the increase in rate from 5% to 12.5%. A supply of holiday accommodation is a single supply of services; the basic tax point is completion of the service, but this can be overridden by the creation of an actual tax point.

An actual tax point is created by a pre-payment, advance issue of a VAT invoice, or issue of a VAT invoice after, but within 14 days of the basic tax point.

So, where you take a booking either with a payment of a deposit of payment in full between now and 30th September (inclusive) this creates an actual tax point (in the case of a deposit, the tax point is created only to the value of that payment) even if the stay is due to take place on or after 1st October 2021.


You can benefit from the 5% rate for all payments received before 1st October, even if the holiday takes place after the rate has increased.

SEMLEP’S Recovery & Resilience Grant scheme opens

What is the Recovery & Resilience Grant Scheme?

The R&R scheme offers matched funding to businesses to invest in new technologies, plant equipment, or machinery to help businesses create employment opportunities.

The minimum grant is £5,000 and the maximum grant available is £50,000.


Applicants must meet the following criteria:

  • Be an SME (employ less than 250 people and your turnover is less than EUR 50m or annual balance sheet less than EUR 43m).
  • Be a trading enterprise (and have at least 1 years’ worth of accounts).
  • Be registered in the UK and have a base in the South East Midlands area.
  • Be ready to invest or expand in the local area.
  • Must not have been a company ‘in difficulty’ on 31 December 2019.
  • Must not have already received a Recovery and Resilience grant.
  • Must not be a repeat application, including from a linked company.


The SEMLEP grant is subject to available funds, so if you do meet the criteria and would like to apply, do so as soon as you can.