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VAT rate change for hospitality and tourism sector

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The VAT rate change for hospitality and tourism sector in Sage Accounting.


The VAT rate for hospitality changes back to 20% from 1st April.

This explains what to do to revert back to the Standard 20% rate.

About the changes

The UK VAT rate on hospitality, holiday accommodation and attractions is changing back to the STD 20% VAT rate from April 1st.

Transactions, where you have been using the 12.5% rate, will now be at a Standard rate of 20% VAT.

For detailed information about what's included, see the government support page:


What do I need to check?

Here is a list of all the different areas and transactions that you may need to update. If you think an area applies to your business, select the link for more information.

  • Ledger accounts: Update any ledger accounts which use a default VAT rate of Lower rate 2 12.5% to Standard 20%
  • Products and services: Update any products and services which use a default VAT rate of Lower rate 2 12.5% to Standard 20%
  • Recurring invoices: Change any recurring invoices that currently use Lower Rate 2 12.5% back to the Standard 20% rate
    Change after the last invoice recurred using the 12.5% VAT rate and before the first recurrence at the Standard 20% rate
  • Recurring payments and receipts: Stop any recurring payments or receipts that currently using the 12.5% rate. Recreate them using the Standard 20% rate
  • Importing Quick Entries: Update your quick import template change all transactions using the 12.5% back to the Standard 20% rate
  • Bank feeds and bank statement imports: Update your bank rules and make sure any bank transactionsfrom bank feeds or bank statement imports that relate to hospitality, holiday accommodation and attractions, use the Standard 20% rate
    Do this the first time you import transactions from a bank feed or bank statement after 1st April
  • Converting quotes, proformas, drafts and estimates to invoices: Change the VAT rate on any quotes, proformas, drafts and estimates that use the Lower Rate 2 12.5% rate before they are converted to an invoice
    This can be done at any time if you know the invoice will not be created before 1st April
  • Copying quotes, estimates, invoices and credit notes: If you have copied existing transactions that use the 12.5% rate, change the VAT rate applied before saving the invoice
  • VAT Cash Accounting: Even if you use VAT Cash Accounting, VAT is still calculated when you create an invoice
    You still need to consider the VAT rate being applied on invoices after 1st April
  • Flat Rate VAT: If you use Flat Rate VAT, the percentages you apply may change part-way through the VAT period
    Check for any changes when you calculate VAT payments after the rate change
  • Future-dated transactions: Check for transactions dated after 1st April that use the 12.5% rate and update them to use the 20% VAT rate

Future-dated transactions

If you've entered a transaction that's dated after 1 April 2022, and it relates to hospitality, holiday accommodation and attractions, you may need to change the VAT rate to Standard 20%.

The quickest way to see future-dated transactions is to run the Nominal Activity report.

  1. Go to Reporting and from the drop-down select More.
  2. Select Nominal Activity.
  3. For the Period choose Custom.
  4. Change the From date to 01/04/2022.
  5. Change the To date to 31/03/2023.
  6. Click Calculate.
     TIP: If you have no values in the Total Debits this period and Total Credits this period columns then you have no future dated transactions.
  7. Select Export Detailed.
  8. Confirm you want to Export All Accounts.
  9. To save or print the report, from the Export menu, and then select CSV or PDF.

The report is ready when a notification displays on the main navigation bar, to the left of Profile. Select the notification bell to open the report.Image


This article provides general rather than specific guidance to assist all of our customers. We always do our best to make sure that the information is correct but as it's general guidance, no guarantees can be made concerning its suitability for your particular needs. The information is valid at the time of publishing and is provided without any warranty of any kind, express or implied. You should take professional advice if you require specific guidance on your individual circumstances, for example, to ensure that the results obtained from using our software comply with statutory or regulatory requirements.

For VAT, customs and excise and duties enquiries you should call the HM Revenue and Customs (HMRC) National Advice Service Helpline on 0300 200 3700, contact your local HMRC office or visit their website at In no event will we be liable to you for any direct, indirect, consequential or incidental loss or damage arising out of or in connection with your use of the information provided.