A New VAT Threshold for the Hospitality Sector | New VAT Threshold | What is VAT Threshold | Are the Different VAT Rates
A new VAT threshold for the hospitality sector 758 513 Stepping Stones Accountancy

A new VAT threshold for the hospitality sector

On 1st October a new VAT rate of 12.5% was introduced for the hospitality industry, this temporary rate now means certain businesses will have to deal with four different rates of VAT. These consist of 0%, 5%, 12.5% and 20%. Fortunately, this will only be for a short period of time as the 12.5% scheme will only run until 31st March 2022.

Who is affected by the new rate?

Those impacted with this new rate are suppliers to the hospitality sector. Since July 2020 they would have been charging VAT at the rate of 5% but will now have to charge VAT at the rate of 12.5%.

What happens to any invoices not yet paid?

For any invoices that were raised at the original 5% VAT rate and providing they were issued before 1st October 2021 nothing changes. Alongside this, if for some reason these invoices need to be adjusted, such as a drop in price or a cancelation, then changes can still be made with the 5% rate also still applying.

Changes also to the flat rate scheme

Further changes which should be highlighted are the new percentage rates applicable from 1st October, as part of the flat rate scheme (FRS).

  • Catering (which includes restaurants, café’s, food outlets and takeaways) – The 4.5% rate has increased to 8.5%
  • Hotels (including all types of accommodation) – The 0% rate has increased to 5.5%
  • Public Houses – The 1% rate has increased to 4% 

It should be noted that a business may need to account for the 2 different flat rate charges. For example, if you are in the Catering field and complete a VAT return for August, September and October then you will need to account for VAT charges of 4.5% for 2 months and then 8.5% for the third month.

Staying on top of the changes

Of course, when any new changes are implemented, there can be confusion as to what VAT charges should be made. The most reliable solution will be to make sure your online accounting software is able to adapt to the 4 different rates. Failing that seek professional help and speak to your account who can advise you.

If you are looking for some help, then feel free to call us on 01173 700 079 or e-mail


A Change In VAT Charges As A Result Of Brexit | VAT Help Brexit | VAT Advice
A change in VAT charges as a result of Brexit 758 513 Stepping Stones Accountancy

A change in VAT charges as a result of Brexit

As we prepare for the impact of Brexit, our European Union customers could be entitled to some VAT-free services.

Any business that is expecting their taxable supplies to be less than £83,000 (which is the deregistration threshold) for 2021 can deregister from VAT on 31st December 2020. Alongside this there are other scenarios of non-chargeable VAT.

If you are a business supplying to a consumer (B2C) that is a resident outside of the EU then no VAT needs to be charged. As an example, if you provide accountancy services to an EU country then prices will need to include the 20% VAT but if the customer is outside the EU (for example in Johannesburg) then no VAT is charged. 

As of 1st January 2021, legislation is being changed so that services provided to customers who are not in the UK, but who still remain in the EU, will not be charged VAT. This means that outside of the UK no VAT charges will apply for the direct business sales of items to consumers. Full details can be found via this link –   

Although companies can deregister for the VAT scheme if they will be solely working with clients outside of the UK, it is their choice, and they can still remain part of the scheme. This then means that any work within the UK which they receive from a supplier, classed as input tax, enables them to claim back as UK expenses.

In summary the new regulations coming in to force on 1st January 2021 will provide some VAT saving opportunities for UK suppliers of business-2-consumer products dealing with any company outside of the UK. The key benefit will be a decrease in tax yield from the HMRC.

If you have any questions or need some help in regard to VAT charges please call us on 01173 700 079 or e-mail

VAT Charges for Online Marketplace | VAT Advice for Selling Online | VAT Help Bristol | VAT Advice Online
VAT Charges for Online Marketplace 758 513 Stepping Stones Accountancy

VAT Charges for Online Marketplace

More and more people are setting up their own businesses as a result of COVID-19, whether it be because of redundancy or just taking a fresh look at life following lockdown and deciding to make a change.

When these businesses start out though they only have a small client base, so for these vendors the quickest route to get their goods or services to a larger market can be via a third-party online marketplace such as Etsy or Amazon.

Whilst this is an attractive and seemingly simple way to reach new customers, there are some considerations that need to be taken into account when selling in this way, such as commission fees, transaction charges and VAT charges. Things to be aware of include:

  • VAT is payable on the full price of the product or service, not the net amount after fees have been paid to the online marketplace.
  • If the online marketplace is based outside of the UK, as is often the case, a UK business that is VAT registered must apply the reverse charge on their VAT return.
  • If the sales are to EU based customers, as of the 31st December 2020 it is important to remember that the transitional deal ends and VAT will be charged at the rate of the customer’s country where applicable.
  • Sales to UK customers will be at standard rate.
  • Sales to customers outside of the EU are not liable for VAT.
  • Where a business is not VAT registered, any payments to overseas suppliers are treated as taxable sales.

The rules can seem somewhat complicated so if you are unsure about how they apply to your business it is important to seek advice from and accountant who will be able to clarify what VAT payments are due.

If you have any questions or need some assistance then please call us on 01173 700 079 or e-mail

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