You have probably seen the news that a VAT reduction is coming into effect this summer.
We wanted to make sure you have a clear picture of what is happening, whether it applies to you, and what you need to do before 25th June.
What has changed?
The government has introduced a temporary reduction in VAT from 20% to 5% on certain supplies to families during the school summer holidays.
It runs from the 25th June to 1st September 2026, and the standard 20% rate returns from 2nd September.
This is confirmed in HMRC’s published guidance (RC Brief 5/2026, 21st May 2026).
Does it apply to you?
The change applies to three types of supply:
1. Children’s meals served on your premises – if you have a dedicated children’s menu, meals on that menu qualify for 5%.
– The whole package qualifies (including a soft drink or dessert where included in a fixed price).
– Takeaway children’s meals do not qualify.
– If you simply offer smaller portions of adult dishes, those do no qualify either – it is the presentation and marketing that determines eligibility, not portion size.
2. Children’s and family tickets for cinemas, theatres, shows and exhibitions – children’s tickets qualify.
– Family tickets that include at least one child admission qualify in full.
– Adult-only tickets remain at 20%.
3. Admission to certain attractions – if you operate a theme park, amusement park, zoo, aquarium, soft play centre, museum, heritage site, adventure park, circus, or observation attraction, the 5% applies to all your admission charges during the period, not just children’s tickets.
– Only the admission charge qualifies – food, retail and other services remain at their normal rate.
What do you need to do?
If any of the above applies to your business, there are a few practical steps to take before 25th June:
- Contact your EPOS or till provider now and ensure qualifying items are coded at 5% from 25th June.
- Do not leave this until the last week.
- You will also need to decide whether to pass the saving on to customers through reduced prices or whether to absorb it into your margins.
- There is no obligation either way, but whatever you decide, be consistent and make sure your team is aware of the approach.
- Make sure your accounting software can handle two VAT rates on the same transaction and is set up to report them separately.
- If you take advance bookings or prepayments, speak to us about how to handle supplies already paid for at 20% that fall within the relief period.
- Plan for the reversion on 2nd September – your systems need to go back to 20% from that date.
One thing to watch:
If you sell season passes or annual memberships, these do not qualify for the reduced rate unless they are priced the same as a standard single-day entry ticket.
Get in touch:
If you are unsure whether this applies to you, or you would like help working through any of the steps above, please do not hesitate to get in touch.
We would much rather you ask and find out it does not affect you than miss something that does
Leanne Lally
Head of Tax