The government has announced a temporary reduction in the VAT rate from 20% to 5% for certain supplies aimed at families during the 2026 summer holiday period.
The reduced rate will apply from 25 June to 1 September 2026 (inclusive) and forms part of the government’s ‘Great British Summer Savings’ initiative.
Guidance on how the rules will work are set out in Revenue and Customs Brief 5 (2026): Temporary reduced rate of VAT for children’s meals, tickets and family attractions. While the measure is straightforward in principle, the detailed conditions mean that applying the reduced rate correctly may requires changes in processes.
Key Facts and dates:
Temporary reduced VAT rate of 5% (instead of the standard rate of 20%)
Applies from 25 June to 1 September 2026 (inclusive)
Covers certain children’s meals, tickets to entertainment venues and admissions to attractions
Applies based on how supplies are marketed, priced and presented
Applies across the UK
Normal VAT rules continue to apply to mixed or non-qualifying supplies
What business qualify for the summer 2026 VAT reduction:
The reduced rate applies to businesses making supplies to families with children, including:
Restaurants, cafés and similar establishments
Cinemas, theatres and performance venues
Operators of theme parks, zoos, soft play centres, circuses and other attractions
Museums and similar venues
Given the short lead-in time, businesses will need to make changes to systems and pricing quickly ahead of implementation.
What supplies qualify for the 5% VAT rate in summer 2026
The reduced rate applies to three categories of supply where the relevant conditions are met:
Children’s meals supplied for consumption on the premises. i.e. No takeaways
Children’s admission tickets to cinemas, theatres, exhibitions, concerts and shows. Where a family ticket includes at least one child, the reduced rate can apply to the full ticket price, including any adult admissions within that package.
Admission tickets to certain attractions suitable for families with children.
VAT on children’s meals, conditions and exclusions
The reduced rate applies where a meal is:
Marketed, priced and presented as a children’s meal, and
Supplied as part of catering services for consumption on the premises
Whether a meal qualifies depends on how it is marketed, presented and priced, rather than who consumes it. The reduced rate does not apply to:
Smaller or discounted versions of adult meals
Shared meals meant for both adults and children
Takeaway food
Where a children’s meal is supplied as a fixed package (for example including a drink), the whole package can qualify if it meets the conditions.
VAT on children’s tickets, cinema, theatre exhibitions and shows
The reduced rate applies to children’s admission tickets to:
Cinemas
Theatres, concerts and shows
Exhibitions
A children’s ticket must be marketed and sold specifically as a child admission.
Where a family ticket is sold for a single price and includes at least one child admission, the reduced rate can apply to the entire ticket.
VAT on attractions: theme parks, museums, zoos and soft play centres
The reduced rate applies to admission charges for certain attractions suitable for families with children, including:
Theme parks, amusement parks and fairs
Zoos, aquariums and wildlife attractions
Circuses
Museums and similar cultural venues (where not already exempt)
Soft play centres and indoor play facilities
Adventure parks, nature reserves, farm visitor attractions and observation attractions
The reduced rate applies to the charge for the right of admission only, regardless of age. Other supplies, such as food, merchandise or upgrades, remain subject to their normal VAT treatment.
Where a supply is already exempt from VAT (for example under the cultural exemption), the reduced rate will not apply.
VAT on bundles and mixed supplies: how the 2026 VAT cut applies
Where supplies are provided as part of a package, normal VAT rules continue to apply.
Only the element that falls within the qualifying categories can benefit from the reduced rate. Other elements must be treated according to their normal VAT liability.
The outcome will depend on how the bundle is marketed and structured.
Time of supply rules for the 2026 VAT cut: advance bookings
The reduced rate applies to supplies of a right of admission between 25 June and 1 September 2026.
In practice:
Admission must take place within this period
Tickets purchased during the period for use after 1 September 2026 do not qualify
Businesses can choose to apply the reduced rate to prepayments
What businesses should do:
The temporary reduced rate of VAT introduces practical considerations, including:
Identifying which supplies qualify for the reduced rate
Reviewing how products and services are marketed
Pricing decisions
Applying the correct VAT treatment to mixed or bundled supplies
Updating systems and processes within a short timeframe including epos tills
The risk of misapplying the reduced rate, particularly for more complex arrangements
