VAT cut: How the tax rate change affects you, including cheaper Happy Meals and holidays
BRITS can nab cheaper meals, drinks and holidays in the UK from July 15 as businesses pass on a VAT cut to customers.
We explain how the tax rate change for firms in the hospitality and tourism industries affects you.
⚠️ Read our coronavirus live blog for the latest news & updates
How has the VAT rate changed?
VAT is a tax paid by businesses on the items or services they sell and is typically passed on to consumers in the price they pay for these goods.
The tax has been slashed from 20 per cent to 5 per cent for businesses in the hospitality and tourism industries across the UK from July 15.
The measures were first announced in Chancellor Rishi Sunak's mini-Budget last week.
The cuts will last for six months until January 12, 2021.
The idea is that businesses will pass on the tax savings to households in the form of lower prices, but they don't have to do it so you're not guaranteed better deals.
CORONAVIRUS CRISIS - STAY IN THE KNOW
Don't miss the latest news and figures - and essential advice for you and your family.
To receive The Sun’s Coronavirus newsletter in your inbox every tea time, .
To follow us on Facebook, simply .
Get Britain’s best-selling newspaper delivered to your smartphone or tablet each day – .
How the tax cut affects you
Restaurant meals
The tax cut will apply to food eaten in restaurants, pubs, bars, cafés and other similar premises across the UK.
Hot takeaways will also be covered, but cold takeaways won't be - some items such as pre-prepared cold takeaway sandwiches are already VAT-free.
If the cut is passed on in full, it could mean households save 12.5 per cent on takeaways and dining out.
Restaurant chains including McDonald's and Nando's are among those to reduce prices thanks to the VAT cut.
McDonald's has recommended that franchisees reduce prices on classics such as the Big Mac, quarter pounder with cheese and six chicken McNuggets.
While Nando's is passing on VAT cuts in full across all menu items excluding alcoholic beverages.
Drinks
Booze is excluded from the VAT cut, but it'll apply to non-alcoholic drinks in the same places as mentioned above.
Yet Wetherspoons has said it'll use the VAT cut savings to slash prices by up to 28 per cent on ales as well as food, coffee and soft drinks.
It means Wetherspoons customers can get a pint for just £1.29.
UK holidays
The VAT cut also applies to holiday accommodation at hotels as well as holiday and caravan parks.
If you're planning a big family holiday in the UK, you can save hundreds of pounds if businesses pass it on in full.
For example, a family of four on a six-night trip to Cornwall would typically pay £2,387 for bed and breakfast, and for lunch and evening meals with soft drinks.
But they could save £298.37 and bring costs down to £2,088.63 if VAT cuts are passed on in full - this of course assumes current prices already include VAT at 20 per cent.
Accor Hotels, which owns Ibis, Mercure, Novotel and Sofitel, and Marriott have both said the VAT cut will be passed onto future bookings.
While Park Holidays, which owns 31 campsites across the UK, says it too will pass on the full VAT savings to future bookings and to existing ones where holidaymakers have yet to pay.
Tickets at attractions including theme parks
Last but not least, the government has also reduced the VAT rate on admission to certain attractions such as theme parks - we've listed all the business below.
If passed on in full, it means one full-price adult ticket to Thorpe Park or Legoland Resort in Windsor would drop from £55 to £48.13 each - a saving of £6.87.
While the price of an adult ticket to Longleat Safari Park would fall from £29.95 to £26.21 - saving you £3.74.
Full list of businesses where VAT will be cut
THE VAT rate has been slashed for the hospitality and tourism industries in order to help them bounce back from the coronavirus crisis.
- Restaurants, cafes and pubs
- Hotels, inns, boarding houses and similar establishments
- Holiday and caravan parks and other holiday accommodation businesses charging fees for tent pitches or camping facilities
- Shows
- Theatres
- Circuses
- Fairs
- Amusement parks
- Concerts
- Museums
- Zoos
- Cinemas
- Exhibitions
- Similar cultural events and facilities
Most read in Money
Mr Sunak also revealed in July that restaurant and pub meals will be slashed in half with Eat Out To Help Out scheme from Monday to Wednesday during August.
READ MORE SUN STORIES
The chancellor says these combined measures will create a £4billion saving for the hospitality and tourism sectors that will benefit over 150,000 businesses, as well as helping to protect 2.4 million jobs.
These industries have struggled during lockdown with pubs, restaurants and cafes only allowed to reopen on July 4 in England.