A 15% VAT cut has now come into force, making Restaurants and Cafes lower food and beverage prices.
Major chains and franchises like McDonald's and Starbucks are included in the new price reductions after it was announces by the Chancellor that a temporary VAT cute from 20% to 5% will take place, which is to stay in effect until 12 January next year.
The VAT (Value Added Tax) reduction will affect hot food, non-alcoholic beverages and accommodation, as well as access into some venues and events. This is said to help people during this difficult time, however certain attractions such as public zoos and museums may not pass on the reduction benefits.
What is VAT?
Value Added Tax, or VAT, is the tax you have to pay when you buy goods or services.
The standard rate of VAT in the UK is 20%, with about half the items households spend money on subject to this rate. There is a reduced rate of 5% which applies to some things such as children's car seats and home energy. When you see a price for something in a shop, any VAT will already have been added.
There are also various items for which you do not have to pay any VAT, such as most supermarket food, children's clothing, newspapers and magazines.