United Kingdom - VAT rate change 15th July

Dear Valued Client

On the 9th July the UK Government announced that there would be a temporary reduction in VAT on certain supplies and services in the Hospitality industry.

You can find official guidelines as outlined by the government here.


HotelTime have made every effort to ensure that the minimal manual work is required by Hotel in order to comply with the new VAT rules.

However the responsibility for setting the correct VAT rates for Guests and recording it correctly lies with the Hotel.

Therefore Please make extensive checks to ensure that all of your rates and services have the correct Rate Code according to the requirements and Tax liabilities of your property.

HotelTime have made the following provisions:

All Accommodation system items (inc Meal Plans portion) on Open Reservation accounts and Post Masters will be re-calculated to the 5% VAT rate.

All future and ongoing reservations will be recalculated to 5 % VAT rate

* Please note there are examples where VAT rates will need to be updated/re-calculated manually. Specific cases will depend on the individual Invoicing, Accounting and reporting procedures of your Hotel.

Some examples of where manual edits/adjustments/recalculation may be required include:

Postmasters with Open balances:

As per above VAT rate will be re-calculated by HotelTime from 20% to 5%.

For stays before July 15th the rate should be manually adjusted back to 20%

Reservations for period July 15th 2020 – January 15th 2021 where the Final Invoice was issued:

N.B HotelTime recommend to insert a ‘Deposit Payment’ when receiving a pre-payment. NOT to ‘Settle and close’ the account

If,, however, the Hotel account has been settled and closed before arrival the Invoice will need to be manually edited to adjust from 20% to 5%

Click here to see how

Any additional products and services for which you wish to change the VAT rate to 5% (e.g Food and Non Alcoholic beverages) should be manually changed to 5% in system settings.

If you have Rate Codes set up with a specified VAT rate:

Most Rate Codes will be set up with default Rate Code (20%) according to Room Type

However if you have a Rate Code with specific VAT rate set up – this will have to be adjusted manually.

There may be other circumstances – according to your operation or set up which requires other manual intervention.

What about changing back from 5% to 20% in January 2021

HotelTime will, by default, update all of your Rate Codes to reflect a VAT rate of 5% for all future reservations.

In January 2021 the change will be reversed (from 5% à 20%) and at this point the VAT for all future reservations will be recalculated

If you do not wish to follow this procedure you can create Rate Codes with “Stay Dates” after 15th January 2021 with 20% VAT rate.

For further questions which are not covered by this Article and asosicated Videos please contact Customer Support. Videos will be published on 15th of July.

Please provide specific queries – where possible include Screenshots and/or Reservation numbers and/or Account number and/or Specific figures and dates relating to Reports.

Customer support department

1 Comment

Have a look on videos:

How to edit VAT rate of item or service


Rate Code with no change required


Rate code with change required


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