VAT reduction

Tom161992

My fiance and I, are going to view wedding venues this weekend with the view to get married in October 2021.

With the recent VAT reduction in hospitality, does anyone if VAT rate charged is at the time of booking or the time of the event taking place?
Any help would be great! Thanks!

tripled

The VAT rate they have to charge is the one at the "tax point" - see https://www.gov.uk/vat-record-keeping/time-of-supply-or-tax-point. So in your case, the earlier of when they invoice you and/or you make a payment. That being said, they may advertise a VAT inclusive price and there would be no obligation to change that price when the VAT rate changes (effectively they would be increasing their ex-VAT price by an amount that offsets the VAT reduction).

kangaroo67

I have asked the same question to a venue too regarding a booking for 2022. They believe that both the payment and delivery of the service need to be before Jan 2021 to benefit from the 5% VAT rate. From what I have read on tax points, if they were to invoice and we were to pay before Jan 2021, we would benefit from the 5% rate. I can't see anything stating that the tax point would be in 2022 if invoiced and paid before Jan 2021 regardless of the delivery date.

I'd be interested to know if anyone has any success with this elsewhere.

Penguin_

You do realise that not all companies are passing on the reduction to customers? I'd imagine the price for the wedding won't change as they're usually quoted £xxx pp rather than £xxx plus VAT per person...

bradders1983

Penguin_ said:

You do realise that not all companies are passing on the reduction to customers? I'd imagine the price for the wedding won't change as they're usually quoted £xxx pp rather than £xxx plus VAT per person...

^^^this. Even room hire will be a headline figure inclusive of VAT, its only broken down on invoices for tax purposes.

A company charging £30 per head today will still be charging £30 per head on Wednesday, to think otherwise would be churlish. They dont charge "£25 a head plus VAT" to normal consumers, or at least very few do.

kangaroo67

Penguin_ said:

You do realise that not all companies are passing on the reduction to customers? I'd imagine the price for the wedding won't change as they're usually quoted £xxx pp rather than £xxx plus VAT per person...

Actually in my experience so far I’ve found that a large percentage of venues advertise exactly that - a price which is then noted as “vat not included” - in other words £xxx plus VAT per person. Especially when it comes to food....

JCS1

And don't forget it's only food at 5%, Room Hire, Alcoholic drinks and any extras are still at 20%, so any saving may be minimal..  The company can't recognise the sale on the P&L until the event has taken place, but they can keep on their balance sheet.