Financial Matters

With David Frederick FCCA | Marcus Bishop Associates | marcus-bishop.com

When Three Becomes Four

The economic effects of the pandemic will be felt long into 2022, well at least until 31st March 2022 for businesses in the hospitality sector and their clients. That probably covers most of the population! The impact into March 2022 is based upon, the arrival of our fourth VAT rate. From 1st October 2021 - 31st March 2022 the rate of VAT on food, accommodation and entry fees to attractions increases from 5% to 12.5%. This forms part of the government’s ongoing package of measures to assist the hospitality sector. However, the increase in the VAT rate has not been widely welcomed by many in the sector. A restaurant owner who last February said, “this VAT increase is not helpful. In a time when we’re struggling with supply chain and staffing issues across the industry, as a result of the wider effects of Brexit and COVID-19. Many of us are still deep in arrears with rent, have Bounce Back Loans and other debt repayments which have been pushed back. An increase from April 2022 would be more appropriate timing, allowing us to grow through the typical bonus Xmas period.” In contrast the owner of an established and long-standing catering company said, “the VAT increase from 5% to 12.5% is going to have a monumental impact on our clients. We have picked up a huge amount of collection and reheat at home by new clients who are taking advantage of the reduction in VAT. Working from a commercial kitchen with overheads it means the wolf that has been kept from the door will now be knocking again!” To aid confusion the VAT rate was reduced from the standard rate of 20% to 5% in July 2020 as part of the government’s business aid package during the COVID-19 pandemic. Therefore, this increase is the government’s gradual step to return the hospitality sector to the standard rate of 20%. Despite the challenges encountered by the hospitality sector of the new 12.5% VAT rate, these businesses face more practical matters. Firstly, the adjustment of their tills to handle four VAT rates and secondly, the added complexity of their VAT reporting. This will not only be for the first quarter of the new increase but ongoing. However, hospitality businesses should not neglect the possibility of some VAT planning options and contact their accountant and tax advisors. With our minds on MTD (Making Tax Digital) just around the corner in April 2022; the practical challenges of four VAT rates might just spur the small business community to begin their MTD journey to embrace doing business in the digital age. It is just unimaginable to comprehend how businesses will cope with four VAT rates without a sophisticated sales receipting system. The reduced 12.5% rate VAT applies to the following: 1) Food and non-alcoholic beverages sold onpremises for consumption, for example, in restaurants, cafes and pubs. 2) Hot takeaway food and hot takeaway nonalcoholic beverages. 3) Admissions to attractions that are not already eligible for the cultural VAT exemption including: a) Theatres b) Circuses and fairs c) Amusement parks d) Concerts e) Museums and exhibitions f) Zoos g) Cinemas h) Sleeping accommodation in hotels or similar establishments, holiday accommodation, pitch fees for caravans and tents, and associated facilities. Sporting events and alcoholic drinks will not be subjected to the reduced VAT rate. The other three VAT rates remain unchanged. Standard rate, 20%, applicable to most goods and services; reduced rate, 5%, applies to certain goods and services (including children’s car seats and home energy); and zero rate, 0%, applicable to certain goods and services, including children’s clothes and most food items. Hospitality businesses using the Flat Rate Scheme will also enjoy a temporary reduced VAT rate. The future is certainly all about VAT in hospitality.

Can you add in Herne Hill Music Festival 8-17th October

TICKETS ARE NOW ON SALE. Buy them on-line at: https://hernehillfestival.org. Tickets will also be vailable on-the-door if the event is not sold out. We advise that you check with the venues to see if they have any Covid rules in place.

Monday 11 October: Dulwich WI Monthly Meeting

7pm-9pm. We meet on the second Monday of each month at Fifty Seven, 57 North Cross Road, East Dulwich, SE22. https://dulwichwi.com. 8pm-9pm. The Arts Society Dulwich evening lecture at JAGS Sixth Form Centre. Guests welcome, £10 at the door, no booking required. During the 12th century Palermo became the most intellectually active and artistically eclectic centre in Europe; the great cathedrals of Cefalù and Monreale, the Palatine Chapel of the Norman Palace and the church of Santa Maria dell’Ammiraglio were witness to a brilliant fusion of Norman, Arab and Byzantine art and architecture.

https://www.theartssocietydulwich.org.uk/ programme/lectures.

James Allen’s Girls’ School Sixth Form Centre

Thursday 14 October: Ottolenghi Test Kitchen: Shelf Love by Yotam Ottolenghi & Noor Murad

7.30pm-8.30pm Join Village Books and Alleyn’s School Enterprises for an evening with bestselling author Yotam Ottolength and Noor Murad to celebrate the publication of the first book in a new series Ottolenghi Test Kitchen: Shelf Love. Yotam and Noor will be demonstrating recipes from the book while chatting to author and journalist Felicity Cloake. This event is in partnership with Alleyn’s School Enterprises.

https://mct.alleyns.org.uk/wazzon.aspx.

MCT at Alleyn’s School, Alleyn’s School, Townley Road, East Dulwich SE22 8SU

Thursday 14 October: The Jewel in the Crown: the Arabs and Normans

Saturday 16 October: Climate Change Coffee Morning

10am-1pm. There will be Refreshments & a Cake Stall on sale. You can buy a small garden bulb to plant at home. There will be some activity stalls too. From the 16th of October the Fair Trade Centre will be re-opening on Saturdays again. The Fair Trade Centre, 263 Barry Road, SE22 0JT.

Saturday 16 October: Rocking for Refugees

7.30pm-11.30pm. Herne Hill Welcomes Refugees is a community group, organising and fundraising to resettle refugee families locally, via the government’s Community Sponsorship scheme. Join them for a night of funk, soul, rock and blues, as local band Talking Strawberries perform to raise enough money to support refugee families coming to the area. Talking Strawberries have been playing across London and the South East since 2005 and are London’s only English, Irish, Kiwi and Scottish covers band with three legendary vocalists. It will be a fun night, and you will be helping to making a huge difference to a refugee family’s life. This is also a Herne Hill Music Festival event. #HHWRRocks2021 Tickets: Earlybird £10, General £12/£8 (concessions). £15 on the door. Off the Cuff, Arch 645, 301-303 Railton Road SE24 0JN

Emma Paterson

A big welcome to Emma Paterson who joined SE Magazines last month. Emma is my very first employee and I am delighted to have her support. Emma’s role is Head of Getting Stuff Done!

Hi, I’m Emma and I joined Angela at SE Magazines on 6th September. You may notice there is a similarity in our picture and you would be correct – I am in fact her little sister! I am married, and a mum to two boys, Harry and Charlie. I used to live in East Dulwich many years ago so I know the area! Now I’m not too far away so can still enjoy the delights it has to offer. My background is a mixture of customer focused roles within financial institutions, pension providers and publishing. I hope to have contact with some of you over the coming months and look forward to working with Angela to help continue producing fantastic community magazines!

Emma Paterson (pictured right) with SE Mags Editor Angela Burgess

Stephen J. Smith

F.C.C.A.

Local Chartered Certified Accountant with 30 years small business experience Small Business Accounting Financial Administration & Reporting Payroll VAT Personal Tax Advice Tax Compliance Inheritance Tax Advice

020 8693 1581 | 07931 558480 ssmith@sjsaccountants.co.uk www.sjsaccountants.co.uk