29 September 2020
The Isle of Man government has announced that it is extending the reduced VAT rate for hospitality, accommodation, and attractions to 31 March 2021, in line with the recently announced UK Winter Economy Plan. The reduced rate and its extension are provided in response to the COVID-19 pandemic.
Isle of Man to mirror UK VAT changes
The UK Government today announced that a reduction in the rate of VAT applied to hospitality, accommodation and attractions will now be extended until 31 March 2021.
The reduction from 20% to 5% was originally planned to run for six months from 15 July 2020 until 12 January 2021.
The Isle of Man will also extend the application of the 5% rate to hospitality and attractions until 31 March 2021. The reduced rate of VAT already applies to holiday accommodation in the Isle of Man.
The UK Government also announced an option on how to pay deferred VAT due for payment next spring. The Isle of Man will replicate this measure with more details available in due course.
Businesses that have deferred paying VAT from the period March to June 2020 were due to pay the outstanding amount by 31 March 2021. They will now be able to opt to pay in smaller installments during 2021-2022 without incurring interest.
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