The Chancellor has recently announced a plan to change the UK VAT rate from 20% to 5% for the hospitality sectors. This affects businesses that buy & sell food, provide accommodation or manage attractions.
This is due to come into effect from Wednesday 15th July 2020 and will be applicable till 12th January 2021.
If you are not in the hospitality sector, this is not going to affect your daily use of Sage that much. There is already a 5% tax code, T5, in the software that is included in your VAT return, that is used for Fuel costs.
You will need to use this code for any purchase invoices that go onto the system for the items above. For example, if you have engineers who go to site and have their meals / accommodation paid for by the business, the receipts that you need to put on the system will have the 5% tax rate on them. Be aware though, as alcohol is excluded (boo) so you may have to put 2 lines on for the bill; one for the food / accommodation and one for the drink.
If you are in the hospitality industry and need help with updating your products / recurring invoices / outstanding sales orders so they reflect the new tax codes, please contact us and we can assist. It is also worth bearing in mind that any changes should not be made before the 15th July, and to set yourself a reminder to change them all back when 12th January 2021 comes around!