The Government has announced a temporary reduction in VAT from 20% to 5% on a range of family activities and children’s meals this summer, aimed at helping families with the cost of days out during the school holidays. This VAT news has been announced as part of the Government’s Great British Summer Scheme to encourage families to get out and enjoy their UK summer and enjoy more family days out.
The temporary VAT reduction will be in effect from 25 June to 1 September 2026 and applies across selected hospitality, leisure and entertainment sectors.
So, going into the 2026 summer months, what do businesses need to know about this change?
For businesses operating within affected industries, it is important to understand exactly what qualifies, how the changes should be applied, and whether any updates are needed to price, systems or customer communications.
What Is Included in the Summer 2026 VAT Reduction?
The reduced 5% VAT rate applies to some qualifying family-focused activities and admissions, including:
- Children’s meals served for consumption on the premises and marketed, presented and priced as children’s meals
- Kids’ and family tickets for cinemas, theatres, concerts, exhibitions and live shows.
- Admission to attractions such as:
- Theme parks
- Zoos
- Aquariums
- Museums
- Soft play centres
- Circuses
- Similar family attractions
For tickets sold before the legislation officially comes into force, businesses can choose whether to:
- Apply the reduced VAT rate retrospectively, or
- Refund the VAT difference to customers
The temporary VAT relief has been introduced to help reduce costs for consumers over the summer period. Although the Government expects businesses to pass the VAT saving on through lower prices, this is not mandatory and businesses can decide whether and how to reflect the reduction in customer pricing.
What Is Not Included?
There are also some exclusions businesses should be aware of when going into the summer. The VAT relief does not apply to:
- Sports facilities and sporting activities.
- Certain season tickets or memberships.
- Non-qualifying food and drink sales outside dedicated children’s menus.
The Government have also confirmed that season tickets will only qualify where the price matches a standard single-entry admission. Businesses offering memberships or multi-entry passes may therefore need to review how these are structured and charged.
What Should Businesses Prepare for Summer VAT Reductions?
If your business operates in hospitality, leisure or entertainment, now is the time to review:
- Pricing structures.
- VAT settings within EPOS or booking systems.
- Existing ticket sales.
- Customer communications and marketing materials.
- How qualifying and non-qualifying sales are separated.
Getting this right early can help avoid confusion during the busy summer period and ensure VAT is being applied correctly.
SMH Group offer expert VAT Consultancy services to help businesses navigate changes to VAT regulations and ensure your business runs smoothly.
What Other VAT News Should Businesses Be Aware Of?
May 2026 has seen even more VAT news for businesses in the UK. Also announced this week was an increase to the Approved Mileage Allowance Payment (AMAP) rate for employees using their own vehicle for work purposes.
The change, which is backdated to April 2026 means drivers will be able to claim tax relief on 55p per mile for the first 10,000 business miles travelled in a tax year. Previously, this rate was 45p per mile, meaning a significant 22% difference.
Unsure what you need to do as a business to navigate this change? At SMH Group, we support businesses and individuals with payroll, tax and expense-related matters, helping ensure processes remain compliant and tax-efficient.
Need Advice on VAT News or Business Tax?
Temporary VAT changes can create practical and administrative challenges, particularly for businesses handling mixed supplies, bookings or different ticket structures.
At SMH Group, our VAT specialists can help you understand how the temporary relief applies to your business and ensure you remain compliant while making the most of the opportunity.
For tailored advice, get in touch with your usual contact or speak to our team today to book a free consultation to help you navigate the change.
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