Will I get a VAT discount or refund on my pre-booked holiday?


BRITS could save hundreds of pounds on staycations thanks to an announcement in today’s mini-Budget.

The Chancellor announced a reduction in VAT to 5 per cent for the hospitality industry, meaning cheaper hotel and restaurant bills.

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But will you get a VAT discount or refund if you’ve pre-booked a holiday? We explain what you need to know.

VAT (value added tax) will be cut from 20 per cent to 5 per cent for businesses in the hospitality and tourism industry from July 15, Chancellor Rishi Sunak revealed today.

VAT is a tax paid by businesses to HMRC on the items or services they sell.

It’s typically passed on to consumers in the price they pay for these goods and services.

The tax cut will apply to accommodation as well as food and non-alcoholic drinks from restaurants and pubs until January 12, 2021.

It will also apply to hotels, caravan and campsites and attractions like cinemas and theme parks.

The government hopes it’ll encourage Brits to go on staycations in the UK in order to help the economy bounce back from the coronavirus crisis.

HM Treasury says the VAT reduction is expected to save households around £160 a year on average.

But some could save hundreds more if they’re planning a big family holiday in the UK.

For example, a family of four on a six-night trip to Cornwall would pay £2,387 now for bed and breakfast, and for lunch and evening meals with soft drinks.

But they could save £298.37 and bring costs down to £2,088.63 if VAT cuts are passed on in full – this of course assumes the price already includes VAT at 20 per cent.

If you’ve just pre-booked a holiday for later this month or summer, you may be frustrated about the timing.

But holiday firms and service providers don’t have to pass on the VAT cut to customers, although it’s hoped they’ll do so.

Haven Holidays says on its website that it won’t change your holiday price unless the VAT rate changes.

It says it may ask you to pay an additional amount if VAT increases after you booked your holiday, so it might be worth asking the provider if it’ll give a partial refund when the rate drops too.

The Sun has asked Haven Holidays for a clarification on its policies, and we’ll update this article once we hear back.

Cool Camping told The Sun each camping and glamping website on its site decide their own prices and discounts, including refund policies.

The VAT charges are also paid by individual campsites, so you’ll need to contact your one and ask for a discount or refund.

We’ve also asked some of the major staycation firms in the UK including Staycationholidays.co.uk, Vacation Rentals which owns Hoseasons and Cottages.com, and Airbnb about their policies.

We haven’t yet heard back so we’ll update this article once we do.

Hoseseasons’ terms and conditions state that if the VAT rate changes, your booking will be invoiced at the new amount of VAT unless you’ve already taken your holiday or paid the full balance to the date of change.

In other words, if you’ve not yet paid the full price before July 15, you may get a discount on your pre-booked holiday.

But if you’ve already paid it in full, it’s unlikely that you’ll get the savings from the VAT cut back.

Of course, the policies will vary between providers though so if you have a holiday booked in the UK after July 15, it’s worth checking the booking’s terms and conditions.

It’ll specify whether VAT is included in the price, making it easer to ask for a refund or discount from the holiday provider.

The VAT measures come as part of Mr Sunak’s mini-Budget today which revealed a huge package to help boost jobs, particularly for younger workers with the launch of a “Kickstart” employment scheme for 16- to 24-year-olds.

The government will also dish out a £1,000 bonus for employers taking furloughed workers back on.

In addition, a stamp duty holiday has been launched in England and Northern Ireland covering the first £500,000 of a property’s value.


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