Update, September 2026: the temporary 5% rate ended on 1 September 2026 and the supplies below are back at 20%. If you cut prices or changed till and Xero tax codes for the summer, check they have been switched back — sales rung through at 5% after 1 September are under-declared VAT. The rest of this post is kept as a record of what the relief covered and how it worked.

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. Just as 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.

What the 5% rate was worth to a café or attraction

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 an £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 to get right while the 5% rate is live

  1. Update your systems

    Your till, accounting software, and booking platform will not change automatically. The rate has applied since 25 June — if you haven't already, update VAT codes on all qualifying product lines now. A mismatch between your systems can create compliance headaches later.

  2. 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.

  3. 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

Temporary 5% VAT FAQs

Is the 5% VAT rate for hospitality still available?

No. It was a temporary measure that ran from 25 June to 1 September 2026, and it ended on 1 September. Children's meals, children's and family tickets and attraction admissions are all back at 20%. If your till or Xero tax codes are still set to 5%, every sale since then has been under-declared and needs correcting.

Did the 5% rate apply to all restaurant meals and hotel stays?

No, and this caught people out. It covered three things only: children's meals eaten on the premises, children's and family theatre or cinema tickets, and admission to qualifying attractions such as theme parks, zoos and soft play. Adult meals, hotel and B&B accommodation and general concert or event tickets stayed at 20% throughout — charging 5% on those was a compliance error, not a saving.

Did takeaway children's meals qualify for the 5% rate?

No. Takeaway was specifically excluded, even where the meal was marketed as a children's meal. To qualify, a meal had to be marketed, priced and presented exclusively as a children's meal and eaten on the premises. Non-alcoholic drinks included in the meal qualified too, but anything where alcohol formed part of the price did not.

What should I do if my till was still charging 5% after 1 September 2026?

Switch every product line back to 20% now and reverse any other change you made in June, including booking platform and accounting software codes. Then work out what went through at 5% since 1 September — that VAT is under-declared, and it is far better to pick it up yourself than to leave it as an unexpected liability for HMRC to find later.

How Lumi Can Help

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:

  • Right away — Review your VAT setup and confirm 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
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This post is intended as general guidance only. Always seek specific advice tailored to your own circumstances and refer to the latest HMRC guidance.