The UK government is temporarily cutting VAT from 20% to 5% on a specific set of supplies from 25 June to 1 September 2026.
This is not a broad hospitality reduction. It applies specifically to children's meals, children's and family event tickets, and admissions to qualifying attractions. If your business sells any of these, you need to act before 25 June — but equally important is knowing what does not qualify, so you don't apply the wrong rate by mistake.
What Qualifies for the 5% Rate?
| Category | What's Included | What's Not |
|---|---|---|
| Children's Meals | Meals marketed, priced and presented exclusively as children's meals, eaten on premises. Non-alcoholic drinks included in the meal also qualify at 5%. | Adult meals; shared meals (adults and children together); any takeaway children's meals; meals where alcohol forms part of the price |
| Theatre & Cinema Tickets | Tickets sold exclusively as a child's admission. Family tickets (at least one child) qualify entirely at 5%. | Individual adult tickets — remain at 20% |
| Attraction Admissions | Admission for any age at: amusement parks, water parks, theme parks, circuses, adventure parks, museums, zoos, aquariums, wildlife parks, farm attractions, soft play centres, indoor bounce/play parks, observation attractions | Pay-per-ride attractions; sporting events and sports facility admission; food, merchandise or upgrades purchased at attractions; supplies already VAT exempt |
Important: adult restaurant meals, hotel accommodation, and general concert or event tickets are not included in this reduction. Applying 5% to these supplies is a compliance error. Only children's meals, qualifying children's and family tickets, and admissions to the specific attraction types listed above benefit.
Why It Matters
The saving is significant. For every £100 of qualifying sales:
- At 20% VAT, you pay £16.67 to HMRC
- At 5% VAT, you pay £4.76 to HMRC
- That is a £11.91 difference per £100
For a business with £50,000 in qualifying summer sales, that is potentially around £5,950 either back in your pocket or available to pass on to customers to drive footfall and loyalty.
Three Things You Must Do Before 25 June
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Update your systems
Your till, accounting software, and booking platform will not change automatically. Update VAT codes on all qualifying product lines before the cut-off date. A mismatch between your systems can create compliance headaches later.
-
Decide on your pricing strategy
You have a choice: reduce prices to drive more trade, or hold prices and improve your margin. Either can work — but make the decision deliberately and make sure your team knows about it.
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Diarise 1 September
The rate goes back to 20% on 1 September. Forgetting to revert is a compliance risk and could leave you with an unexpected liability. Set a reminder in late August and reverse every change you made in June.
Common Mistakes to Avoid
- Applying 5% to adult meals — only children's meals meeting the specific criteria qualify
- Applying 5% to accommodation — hotels, B&Bs and holiday lets are not covered by this measure
- Applying 5% to children's takeaway meals — takeaway is specifically excluded, even if the meal is marketed as a children's meal
- Applying 5% to individual adult tickets for theatre or cinema — adult tickets remain at 20%; only children's and qualifying family tickets benefit
- Applying 5% to pay-per-ride attractions or sporting events — these are excluded even if the venue otherwise qualifies
- Leaving systems on 5% after 1 September
- If you are on the flat rate scheme, check whether HMRC has updated your sector's flat rate for this period
Let us handle the detail
This is a short window with two transitions — in and out — and HMRC will expect the right figures. As your ICAEW Chartered Accountant and bookkeeper, here is how I can support you through it:
- Before 25 June — Review your VAT setup and identify which of your supplies qualify
- During the period — Keep your bookkeeping clean, correctly separating 5% and 20% sales
- VAT returns — Prepare your return accurately if the period straddles either date
- 1 September — Make sure the switch back to 20% happens cleanly with no loose ends
- Ongoing — Provide clear management accounts so you can see exactly what this period did for your margins
This post is intended as general guidance only. Always seek specific advice tailored to your own circumstances and refer to the latest HMRC guidance.