Originally Posted by
stuartpig
It seems they can keep the rate cut for themselves. So true to form that is what they Marriott hotels are doing
From the UK Government website :
On 8 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 cut in the VAT rate from the standard rate of 20% will have effect from 15 July 2020 to 12 January 2021.
These changes are being brought in as an urgent response to the coronavirus (COVID-19) pandemic to support businesses severely affected by forced closures and social distancing measures.
The prime reason for the cut in VAT is to support the hospitality business by reducing the tax bill, and not necessarily to lower prices for the customer.
Previously, if a customer paid £100 for a room, that's a net revenue rate of £83.33 plus VAT (tax) @20% of £16.67
Now the net revenue rate is £95.24 plus VAT (tax) @5% of £4.76
If the hotel chose to pass on the whole of this benefit to the customer, then the revenue-neutral rate would be £83.33 plus VAT (tax) @5% of £4.17, so the customer would pay £87.50