Changes to the leisure & hospitality VAT rate 15th September 2021 To encourage spending in the leisure & tourism sector, the VAT rate for certain supplies was cut from 20% to 5% in July 2020. From 1 October 2021, the VAT rate will rise again to 12.5% and this rate will be in place until 31 March 2022. If your business operates in the leisure & hospitality sector, you will need to ensure that your accounting software is prepared for the change. To add a new tax rate in Xero: In the Accounting menu, select Advanced, then click Tax rates. Click New Tax Rate. Enter a display name and select a tax type. Add the tax component name and enter the VAT percentage. Click Save. To add a new tax rate in Quickbooks: From the left menu, select Taxes. Then, choose VAT. If you have multiple tax agencies, in the top-left ensure that the correct tax agency is selected. In the top right-hand corner next to Add tax, select the Edit VAT drop-down then Edit rates. In the tax rate table, choose the rate you want to change and select Edit. In the Edit tax rate window, change the rate. You can also change the name if you like. Set the Effective date, if required, this will be the date from which the rate change will take effect. Choose Save. Select On or Off beside the tax rate you want to make active or inactive. To confirm your changes select Yes. If you have any questions about how the changes to the leisure & hospitality VAT rate may impact you, please get in touch with your usual Whiting & Partners contact.