Today the government has announced a “Great British Summer Savings” scheme which introduces a temporary reduced VAT rate of 5% between 25 June and 1 September 2026, directly impacting hospitality, leisure and attractions businesses.
The reduced rate applies to children’s meals consumed on-site, children’s entertainment tickets, and all admission tickets to family attractions such as theme parks, zoos and museums. Whilst this will be a welcome boost to the hospitality industry, as always, the devil is in the detail, and the implementation time is short.
Key impacts for businesses:
- Pricing strategy: Businesses can choose whether to pass on the VAT saving to customers or retain it to boost profits — there is no obligation to reduce prices.
- Increased demand: The policy is designed to boost footfall and spending during the summer, supported by measures such as free bus travel for children in England in August.
- Operational changes: Systems, pricing, and processes must be updated to apply the 5% rate correctly within a short timeframe.
- Complex VAT treatment: Careful assessment is needed to identify qualifying supplies, particularly for bundled offers, family packages and mixed transactions.
- Compliance risk: Incorrect application of the reduced rate could lead to errors, making accurate implementation essential.
- Assessing the correct time of supply – treatment of prepayments etc
What this means commercially:
- Opportunity to drive higher visitor numbers and secondary spend
- Potential to improve margins if savings are retained
- Short-term window to maximise peak season performance
Whilst this is a temporary measure, this relief presents a valuable opportunity for businesses—but only for those that act quickly, apply the rules correctly, and take a strategic approach to pricing and operations.
How Xeinadin’s VAT team can help:
- Confirm which products and services qualify for the reduced rate
- Apply correct VAT treatment across complex or mixed supplies
- Support pricing decisions to balance demand and profitability
- Ensure compliance with HMRC guidance and reduce risk
- Assist with system updates and implementation during the transition
Link to news brief: Temporary reduced rate of VAT for children’s meals, tickets and family attractions – GOV.UK
Contact Us
Get in touch with one of our VAT Advisory specialists:
Jane Stacey: [email protected]
Adam Fox: [email protected]
Lisa Grovesmith: [email protected]
Carolyn O’Shea: [email protected]
