As was widely signposted the Minister will reintroduce the 9% VAT rate in the hospitality sector with effect from 1 November 2020. It will initially stay in place until 31 December 2021. In a normal economy such a reduction would stimulate activity in this labour intensive industry resulting in the protection of long term sustainable employment in a sector which has been disproportionately impacted by the current Covid pandemic.
Obviously the full potential of the reduction in the VAT rate will not be felt until the various ‘lockdown’ measures introduced due to the pandemic are relaxed. It is hoped that this measure will encourage, in combination with the ‘Stay and Spend’ tax rebate scheme introduced at the start of October activity in this sector.