VAT Reduction on Summer Activities 2026: What Businesses Need to Know
Summary
- A temporary reduction in VAT from 20% to 5% will apply to certain activities between 25 June 2026 and 1 September 2026.
- The relief covers children’s meals, cultural events, and admission to attractions.
- It applies across the whole of the UK.
- Businesses can choose whether to pass on the saving.
- There are commercial opportunities for increased demand, alongside compliance and operational considerations.
Introduction
The Government has announced a temporary reduction in VAT on selected family activities and children’s meals for the summer of 2026.
While the measure is short-term, it is expected to affect a wide range of businesses in the hospitality, leisure, and entertainment sectors.
This article outlines what is included, and more importantly, what businesses should be thinking about from a pricing, compliance, and commercial perspective.
What is changing?
Fom 25 June to 1 September 2026, VAT will be reduced from 20% to 5% on certain qualifying supplies.
This applies to a defined range of activities, rather than a blanket reduction across sectors.
Which businesses are affected?
The VAT reduction is targeted at the hospitality, leisure, and entertainment sectors so businesses most likely to fall within the scope include:
- Restaurants, cafés, and hospitality venues
- Cinemas, theatres, and event operators
- Museums, zoos, and heritage attractions
- Theme parks, soft play centres, and leisure venues
The reduced rate applies across England, Wales, Scotland, and Northern Ireland.
What supplies qualify for the reduced rate?
Only specific goods and services will attract the 5% reduced rate of VAT. These fall into the following categories and have some have conditions that must be met.
1. Children’s meals
- Must be from a children’s menu
- Must be clearly marketed, presented, and priced as children’s meals
- Must be consumed on the premises
2. Cultural and entertainment tickets
Applies to children’s and family tickets only for:
- Cinemas
- Theatres
- Exhibitions
- Shows and concerts
3. Admission to attractions
Covers entry tickets for both adults and children to:
- Amusement and theme parks
- Zoos and wildlife parks
- Museums and exhibitions
- Fairs, circuses, and adventure parks
- Soft play centres
What businesses should do
Businesses can take steps now to ensure that they are prepared for the change in the rate of VAT and must ensure the correct rate of VAT is applied during the reduced rate period.
In practical terms businesses should:
- Identify whether any offerings fall within the qualifying categories
- Review pricing structures and VAT treatment
- Consider whether to pass on the VAT saving
ahead of the change, and then:
- Update systems and ensure correct VAT coding
- Communicate clearly with customers where pricing changes
during the reduced VAT period to ensure VAT is accounted for correctly and customers are clear on the prices being charged.
Further guidance
Further guidance for businesses from HMRC is available here.
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