On 8th July 2020, the government announced that it would introduce a temporary 5% reduced rate of VAT for certain supplies of hospitality, hotel and holiday accommodation, and admissions to certain attractions. This is to take effect from 15th July 2020 to 31st March 2021.
How do I process this in KashFlow?
When you are entering data into KashFlow, if you have a transaction that will be subject to this reduced VAT rate then you would just need to select 5% from the VAT rate drop downfield. When you are ready to submit your VAT return, the VAT calculation at 5% will automatically be pulled through. There are no other additional steps you will need to action.
If you are unsure which transactions will be subject to this reduced VAT rate then we would advise you to speak to your accountant, unfortunately, this is not something we at KashFlow are able to advise on.
For more guidance on the reduced VAT rate, please take a look at this article from HMRC.