Temporary 5% VAT rate announced for children’s meals and family attractions

Hospitality and leisure businesses will need to act quickly following HMRC’s announcement on 21 May.

The Government has today announced a temporary reduced rate of VAT of 5% on certain children’s meals, family attractions and children’s admission tickets as part of its new “Great British Summer Savings” initiative.

The changes were confirmed in Revenue and Customs Brief 5 (2026) and will apply from 25 June 2026 to 1 September 2026 inclusive.

The announcement is designed to support families with the cost of living during the summer holidays while also encouraging consumer spending across hospitality, leisure and tourism sectors.

Laura Seaward, Director at Old Mill, says the announcement will be welcomed by many businesses, but the short implementation window is likely to create operational pressure.

“Many hospitality and leisure businesses will welcome the potential boost in customer demand over the summer period. However, the practical reality is that businesses now have a very short timeframe to review systems, pricing, tills, websites and VAT treatment before the changes take effect.”

According to HMRC, the temporary reduced rate will apply to:

• certain supplies of children’s meals
• children’s admission to theatres, cinemas, concerts, exhibitions and shows
• all admission tickets to attractions suitable for families with children

The attractions covered are expected to include venues such as theme parks, zoos, museums, fairs and soft play centres.

The reduced rate applies across the UK from 25 June 2026 until 1 September 2026.

While the announcement may generate increased footfall and consumer spending, businesses will now need to move quickly to prepare operationally.

This is likely to involve:

• updating EPOS and till systems
• reviewing pricing structures
• updating menus and websites
• assessing invoicing and VAT coding
• considering how mixed supplies should be treated
• reviewing accounting software and VAT reporting processes

For some businesses, particularly those with multiple sites or complex pricing structures, implementation may not be straightforward.

Laura says businesses should avoid assuming the changes can simply be applied automatically.

“Temporary VAT changes often create practical complications, particularly where businesses have mixed supplies, advance bookings or systems configured around standard-rate VAT. It is important that businesses review the detail carefully rather than relying on assumptions.”

This is not the first time the Government has introduced a temporary reduced VAT rate for hospitality and attractions.

During the COVID-19 pandemic, temporary VAT reductions were introduced for hospitality, accommodation and leisure sectors to stimulate economic activity.

Those changes created a number of technical and practical challenges for businesses, particularly around:

• supplies spanning different VAT periods
• advance payments and bookings
• mixed-rate transactions
• software and EPOS configuration
• pricing strategy and customer communication

Businesses affected by the latest announcement may therefore benefit from revisiting lessons learned during the previous temporary VAT regime.

One of the key questions will be how businesses choose to apply the reduced VAT rate commercially.

Some businesses may pass the saving directly onto consumers through lower pricing, while others may use the temporary relief to help offset rising operational costs and margin pressure.

The Government has indicated it expects families to see savings reflected at the till where possible.

However, with hospitality businesses continuing to face increased wage costs, energy costs and operational pressures, the commercial approach is likely to vary between operators.

Temporary VAT changes often appear straightforward initially, but in practice they can create significant complexity.

Determining which supplies qualify, how mixed transactions should be treated and how systems should apply the reduced rate correctly can all create risk if not reviewed carefully.

Businesses also need to consider the wider VAT implications around record keeping, reporting and evidence should HMRC review the treatment later.

Laura says businesses should use the next few weeks carefully.

“With any temporary VAT change, the detail matters. Businesses should take the opportunity now to review how the rules apply to their specific circumstances and make sure systems and processes are ready well before the changes take effect.”

If your business may be affected by the temporary 5% VAT rate, Old Mill’s VAT specialists can help you understand how the changes apply and support you with the practical implementation. 

Contact us today.