Temporary VAT reduction announced for Summer 2026
As part of its ‘Great British Summer Savings’ initiative, the Government announced that the VAT rate for children’s meals and admission to certain family attractions will be reduced to 5% for the duration of the school holidays. The measure is intended to reduce the cost of qualifying outings to families, which may generate additional spending across the hospitality and leisure sectors. However, businesses have little time to understand how they are affected by these changes and ensure that they are correctly implemented.
What is included the VAT cut?
The relief applies to the following activities when supplied between 25 June 2026 and 1 September 2026:
- children’s meals,
- children’s tickets to events such as cinemas, theatres and exhibitions, and
- admission to attractions such as zoos, circuses, theme parks and soft play centres
Businesses will need to identify which of their supplies are within the reduced rate based on how they are presented to the public.
Rules for children’s meals
Children’s meals will only qualify where they are held out for sale as children’s meals. A small portion meal or a meal ordered from the adult menu for a child will remain standard rated.
A children’s ‘meal deal’ package will qualify where it is supplied for a single inclusive price. Optional items or add-ons will be standard rated.
Exclusions
Takeaway meals and meals including alcohol will not qualify for the reduced rate.
VAT treatment of event tickets
Tickets to theatres, cinemas, shows and concerts will be reduced rated where they are held out for sale as the right of admission for a child. This will come down to how the category of ticket is marketed and presented by the supplier. Family tickets that specify one or more children will also be reduced rated but multi-person tickets that do not specify a child will be standard rated.
Exclusions
Tickets for sporting events will not be covered by the reduced rate.
How to treat multi-use and advance tickets
Admission to family venues such as amusement parks, museums, wildlife parks and observation wheels will benefit from relief regardless of the age of the customer. However, the reduced rate extends to entry to venues only; goods and services supplied separately (such as merchandise or experiences) will not qualify for relief.
A ticket that provides repeat admission or admission to more than one attraction will fall within the reduced rate only if all permitted repeat entries are within the period that the reduced rate is in place. Tickets allowing entry outside of this time will be standard rated unless the ticket is the same price as a single day entry.
How should businesses prepare?
The temporary VAT cut is mandatory. The Government expects VAT savings to be passed on to families. Businesses should therefore consider the following points to ensure that they are prepared: –
- Identify qualifying supplies. This may be complicated where supplies are ‘bundled’ together.
- Review how services are marketed. There may be an opportunity to bring supplies within the scope of the reduced rate by changing how they are presented.
- Update systems, websites and processes to ensure the correct VAT rate is applied.
- Train staff to ensure changes are understood.
- Document decisions.
Businesses also need to decide whether they wish to apply the reduced rate to payments in advance, where the right of admission falls within the qualifying period. Where a business has already accounted for standard rated VAT, it is able to claim back the difference provided the amount is returned to the customer.
For many businesses, the changes present logistical challenges with implementation followed by a reversal ten weeks later.
Final thoughts
While the VAT cut aims to boost consumer spending, it introduces complex rules and tight deadlines for affected businesses.
Taking the time now to review your pricing, systems and VAT treatment will help reduce risk and ensure compliance during the holiday period.
Need help applying the VAT changes?
If you’re unsure how these rules apply to your business, or need support implementing the changes quickly and accurately, our VAT specialists can help.
Get in touch with our team today to discuss how we can support you.
