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The Government has announced a temporary VAT reduction as part of its Great British Summer Savings 2026 scheme.
From 25 June to 1 September 2026, the VAT rate on certain children’s meals and family leisure activities will reduce from 20% to 5%. The scheme has been introduced to help families with the cost of summer days out, while also supporting hospitality, leisure and tourism businesses through increased footfall during the school holidays.
The reduced rate will apply across England, Wales, Scotland and Northern Ireland. In England, the scheme will also be supported by free local bus travel for children aged 5 to 15 throughout August.
What will qualify for the reduced VAT rate?
The reduced 5% rate will apply to specific supplies only. For restaurants, cafés and similar businesses, it will apply to children’s meals served for consumption on the premises, where those meals are clearly marketed, presented and priced as children’s meals.
This means meals from a dedicated children’s menu should qualify, provided they are genuinely held out for sale as children’s meals. Smaller adult portions, lower calorie options, discounted adult meals or shared meals for adults and children will not qualify simply because they are cheaper or smaller.
Where a children’s meal is sold for one inclusive price, such as a main, drink and dessert, the full package should qualify for the reduced rate. However, optional extras, upgrades or items selected from the standard menu will follow their usual VAT treatment. Takeaway meals are not included.
The reduced rate will also apply to children’s and family tickets for cinemas, theatres, exhibitions, concerts and shows. Where adult and child tickets are sold separately, only the children’s ticket will qualify. However, where a family ticket is sold as one package and includes at least one child admission, the whole family ticket should qualify for the reduced rate.For certain family attractions, the reduced rate will apply to admission tickets for both adults and children. This includes attractions such as amusement parks, fairs, circuses, museums, zoos, aquariums, wildlife parks, farm attractions, soft play centres, adventure parks and observation attractions.
Sports facilities, sports events and recreational sporting activities are not included within this temporary VAT reduction, although some sports-related supplies already have separate VAT exemptions depending on the provider and circumstances.
How will this work in practice?
For affected businesses, the key practical step will be identifying which sales qualify and making sure systems are ready before 25 June 2026.
Businesses should review menus, price lists, online booking systems, till systems and accounting software to ensure qualifying sales are coded correctly. The 5% VAT rate should only be applied to eligible supplies during the relief period. Tickets bought during the summer for admissions taking place after 1 September 2026 will remain subject to the standard 20% VAT rate.
For restaurants and cafés, this is likely to mean setting up separate VAT codes for qualifying children’s meals and reviewing how children’s menu items appear on receipts and till reports. Clear descriptions will help support the VAT treatment applied.
For attractions and venues, it will be important to review ticket types carefully. Children’s tickets, family tickets and qualifying admission tickets should be separated from standard-rated items, such as merchandise, upgrades, food, drink or other add ons.
Where businesses sell bundles, packages or mixed supplies, normal VAT rules still apply. Only the part of the supply that falls within the temporary reduced rate should be treated at 5%. Other elements should continue to follow their usual VAT treatment.
Advance bookings and season tickets
The timing of the supply will be important.
The reduced rate applies to qualifying admissions between 25 June and 1 September 2026 inclusive. Where a customer has already paid in advance for an eligible ticket or activity within that period, businesses may apply the lower rate and make any necessary VAT accounting adjustments.
Where VAT has already been accounted for at 20% and the business chooses to apply the 5% rate, HMRC expects customers to be refunded for the additional VAT paid.
Season tickets and repeat entry tickets need particular care. If a ticket allows repeat entries outside the relief period, it will not usually qualify unless it is priced the same as a standard single-entry ticket. Repeat entry tickets used only within the 25 June to 1 September period should qualify, provided the other conditions are met.
What should businesses do now?
Businesses affected by the scheme should take action before the reduced rate comes into effect. This should include reviewing which sales qualify, updating VAT codes, checking online booking systems, training staff and keeping clear records to support the VAT treatment applied.
It is also worth reviewing any advance bookings already taken for the relief period and deciding how any VAT saving will be dealt with.
The rules are targeted and temporary, so it is important businesses apply the reduced rate only where the conditions are met.
If you would like to understand how these changes may affect your business, or you need support reviewing your VAT treatment, till systems, bookkeeping processes or VAT records, please get in touch with our team on 01228 711888. We will be happy to help you prepare with confidence.
