VAT Update: Reclaim Overpaid VAT Due to Temporary Reduced Rates

In response to the 2020 pandemic, the government introduced a temporary reduced VAT rate for specific sectors for the hospitality, hotel and holiday accommodation, and certain attractions.  If you suspect that you overpaid VAT during this period, there is still an opportunity to reclaim it from HM Revenue and Customs. The Temporary VAT Rates The […]

July 29, 2024

In response to the 2020 pandemic, the government introduced a temporary reduced VAT rate for specific sectors for the hospitality, hotel and holiday accommodation, and certain attractions. 

If you suspect that you overpaid VAT during this period, there is still an opportunity to reclaim it from HM Revenue and Customs.

The Temporary VAT Rates

The reduced VAT rate of 5% was effective from 15th July 2020 to 30th September 2021. Following this, the rate increased to 12.5% until March 2022, and then reverted to the standard 20% from 1st April 2022.

The reduced rate covered:

  • Food and non-alcoholic beverages consumed on-premises (e.g., restaurants, cafes, pubs, and bars)
  • Hot takeaway food and non-alcoholic beverages
  • Hotel and holiday accommodation
  • Caravan and camping pitches
  • Admission to certain attractions

The Potential Reclaim of VAT

Businesses must adjust any over-declared output VAT within 4 years from the end of the relevant VAT return period. 

For instance, if you submitted your VAT return on 30th September 2020, you have until 30th September 2024 to reclaim any overpaid VAT. Missing these deadlines will result in the loss of the chance to recover overpaid VAT, so prompt action is essential.

ACT NOW or lose out on a reclaim of VAT

Due to the potential for discrepancies in supplies, payments, or invoices spanning different VAT rates, businesses may have overpaid VAT.  Due to pandemic restrictions many bookings and events were rescheduled, and invoices/payments will have been issued/paid during the periods where the VAT rates changed. This could have resulted in the wrong rate of VAT being charged.

It is advisable to review VAT returns from the affected periods to ensure accuracy. It is crucial correct any errors before the 4-year limit expires and the reclaim is lost.

To ensure that your business does not miss out on reclaiming any overpaid VAT, revisit your VAT returns from the pandemic period.

Contact Jane Deeks for further information

jane@deeksvat.co.uk

07710553831

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