Chancellor Rishi Sunak reduced VAT rates to 12.5% during the pandemic to help struggling businesses in the hospitality sector.

While many were hoping that this would be extended to give organisations time to get back on their feet, the Chancellor has confirmed that VAT rates have been reverted to their usual rate of 20% from 1 April 2022.

The increase will apply to hospitality, visitor attractions and catering services including restaurants and takeaways.

This will have a consequential effect on VAT Flat Rate Scheme percentages from 1 April 2022 as set out below.

Type of BusinessBefore 15 July 2020 and from 1 April 202215 July 2020 to 30 September 20211 October 2021 to 31 March 2022
Catering services including restaurants and takeaways12.5%4.5%8.5%
Hotel or accommodation10.5%0%5.5%


Affected businesses should ensure that their pricing policies, internal systems and processes are updated for the 1 April 2022 change in VAT rate.

If you have any questions about VAT rates or need help with anything VAT-related, please don’t hesitate to get in touch and we’ll be happy to help.



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