Summer VAT Reduction Announced
Summer VAT Reduction Announced - What It Means for Businesses and Families
The Government has announced a temporary VAT reduction on a range of family focused leisure activities and children's meals as part of its new "Great British Summer Savings" initiative.
The measure is designed to help families enjoy more affordable days out during the school summer holidays while encouraging spending in the hospitality, leisure and entertainment sectors.
What is changing?
From 25th June 2026 to 1st September 2026, the VAT rate on certain qualifying goods and services will be reduced from 20% to 5%.
The reduced rate applies to:
Children's meals eaten on the premises
The reduced VAT rate applies where:
- The meal is served from a children's menu
- It is marketed and presented as a children's meal
- It is priced as a children's meal
- It is consumed on the premises of a restaurant, café or pub
Family and children's entertainment
The reduced rate also applies to:
- Children's and family tickets for cinemas
- Theatre performances
- Exhibitions
- Shows and concerts
Visitor attractions
Admission tickets for both adults and children may qualify where they relate to attractions such as:
- Theme parks
- Zoos
- Museums
- Adventure parks
- Soft play centres
- Circuses and fairs
Good news for families
Even if you do not run a VAT registered business, this announcement may still benefit you personally.
The Government has stated that it expects businesses to pass the VAT saving on to customers through lower prices during the qualifying period. This could mean cheaper family days out, children's meals and entertainment throughout the summer holidays.
If you have children or are planning family activities this summer, it may be worth keeping an eye on prices at participating venues.
Important exclusions
Not everything will qualify for the reduced VAT rate. Some key points to note include:
- Takeaway meals are excluded, the reduction only applies to meals consumed on the premises.
- Season tickets or passes covering periods outside the qualifying dates generally will not qualify unless priced the same as a standard single-entry ticket.
- Supplies that are already VAT exempt remain exempt and do not benefit from the temporary reduction.
- Where qualifying and non-qualifying items are sold together as a package, only the qualifying element can benefit from the reduced rate.
What businesses should do now
If your business supplies any of the qualifying goods or services, it is important to prepare before 25th June.
You may need to:
- Update accounting, billing and point-of-sale systems to apply the 5% VAT rate.
- Review menus, ticket pricing and promotional materials.
- Ensure staff understand which sales qualify.
- Prepare systems and pricing for the return to the standard 20% VAT rate from 1st September 2026.
Contact us
If you think your business may be affected and would like assistance with VAT treatment, pricing, or updating your systems, please email our VAT & Bookkeeping Team Managers Victoria and Andrew at VAT-Bookkeeping@astonshaw.co.uk and see how we can assist you.
For everyone else, we hope this update helps you make the most of the summer savings available to families this year.