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Temporary VAT Reduction for Family and Children’s Activities: What Businesses Need to Know

Businesses operating within the hospitality, leisure and attractions sectors could benefit from a temporary VAT reduction being introduced this summer. From 25 June 2026 to 1 September 2026, the VAT rate on certain supplies relating to children and families will reduce from 20% to 5%. While the measure is temporary, affected businesses should review their systems and processes now to ensure the reduced rate is applied correctly and compliance risks are avoided.

Which supplies qualify for the temporary 5% VAT rate?

The reduced rate applies to specific qualifying supplies, including:

Children’s meals

Certain meals specifically for children where they are consumed on the premises.

Children’s admission to shows and events

Admission tickets for children to cultural events such as:

  • theatres
  • cinemas
  • concerts
  • exhibitions

Family attraction tickets

Admission tickets for attractions suitable for families, including:

  • zoos
  • theme parks
  • botanical gardens

Importantly, the temporary rate only applies where the supply would ordinarily be subject to VAT at the standard rate. Existing VAT exemptions will continue to apply as normal.

What should businesses be doing now?

Review till and EPOS systems

Businesses should ensure their till and sales systems are updated to apply the 5% VAT rate from 25 June 2026. Some older systems may require manual configuration to accommodate an additional VAT rate, so it is advisable to review this as early as possible.

Check invoicing processes

Invoices issued during the temporary period should clearly reflect the correct VAT treatment for qualifying supplies.

Take care with mixed supplies and meal deals

Businesses offering meal deals or bundled supplies containing items with different VAT treatments should ensure VAT is apportioned correctly.

For example, a children’s meal deal could contain:

  • a hot meal subject to 5% VAT
  • a zero-rated cold drink
  • a confectionery item remaining at 20% VAT

In these cases, the selling price should generally be apportioned based on the normal standalone selling prices of each item. Incorrect apportionment could lead to compliance issues or underpaid VAT.

Prepare for the temporary period to end

As the reduction only applies until 1 September 2026, businesses should ensure systems are prepared to revert back to the standard 20% VAT rate from 2 September 2026.

Need advice?

If you would like guidance on how the temporary VAT reduction applies to your business, or support reviewing your systems and VAT treatment, please get in touch.