The temporary reduced rate of VAT was introduced on 15 July to support the cash flow and viability of over 150,000 businesses and protect 2.4 million jobs in the hospitality and tourism sectors, and will run until 31 March 2021.
While the Government keeps all taxes under review, this relief comes at a significant cost to the Exchequer, and there are currently no plans to extend the scope of the reduced rate. Pubs that sell food will be able to apply the reduced rate to meals and non-alcoholic beverages consumed on the premises. They are also able to sell hot food and non-alcoholic drinks for take away at the reduced rate.
Alcohol duty was frozen at Budget 2020 in order to help pubs and the alcoholic drinks sector.