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VAT rate change for hospitality industry

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How to apply the reduced VAT rate for hospitality in Sage Accounting Start.


Reduced VAT rate for hospitality extended to 31 August 2023.

The VAT rate for tourism and hospitality remains at 9%, until the 31 August 2023.
This also affects hairdressing and some printed item such as brochures, maps and programmes.


What the 9% VAT rate applies to

The reduced VAT rate of 9 % applies to the supply of:

  • restaurant and catering services
  • guest and holiday accommodation
  • various entertainment services such as admission to cinemas, theatres, museums, fairgrounds and amusement parks

If you're still unsure whether your transactions should be at the reduced rate, check with your accountant or the Revenue.

Which VAT rate to use

In Sage Accounting use the Second Reduced Rate 9%.

Make sure the reduced VAT is applied correctly

Set the default VAT on ledger accounts

Consider setting the Second Reduced Rate 9% VAT rate by default on ledger accounts you use for hospitality and tourism.

You may want to create new Ledger accounts specifically for tourism and hospitality transactions.

Product and services

Consider setting the reduced VAT rate as the default on any products and services you use for hospitality and tourism.

This will make sure that the correct VAT rate is used when entering transactions.

Bank feeds and imported bank transactions

Make sure you select the Second Reduced Rate 9% when processing transactions from a bank feed or imported bank statement.

Copy invoices, quotes, estimates and credit notes

If you copy existing transactions that relate to tourism and hospitality, make sure that they are still using the Second Reduced Rate 9%.

VAT rates are copied at the rate applied to the original transaction.

Future dated transactions

Make sure any transactions created with a date in the future are using the Second Reduced Rate 9%.