The 5% reduced rate of VAT currently applies to certain hospitality supplies including food and drink (but not alcoholic drinks), overnight accommodation and tourist attractions. This will end on 30 September 2021. From 1 October 2021 to 31 March 2022 there will be a special rate for these supplies of 12.5%.
HMRC have specifically allowed (indeed recommend) purchasers to benefit from the reduced rate if they use or pay for the service in advance of the increases. For example, if you book and pay for your Christmas Party in September you will only be charged 5% VAT instead of 12.5%.
As with all of our tax tips and web pages this information is necessarily summarised and of a general nature. If you would like detailed specific advice please contact us.