Temporary 5% VAT cut for children’s meals and family attractions explained

The changes to the VAT treatment of certain child and family related supplies announced by Rachel Reeves as part of the government’s Great British Summer Savings came into force on 25 June 2026. The changes are only very temporary, ending on 1 September 2026 and are likely to create some headaches for those involved in the hospitality and tourism industry.

What the 5% VAT rate covers

The changes mean that a reduced rate of 5% will apply from 25 June 2026 until 1 September 2026 on the following supplies:

1. The sale of children’s meals in a restaurant, café or similar for consumption on the premises.

To qualify the meal must be specifically held out for children only, for example on a separate section of a menu. If the same meal is shown on both adult and children’s menus then the child version must be differentiated by portion size and price. Meals marketed merely as smaller portions will not qualify for the reduced rate.

2. Children’s admission tickets to cinema screenings, theatrical performances, shows and concerts and exhibitions.

The reduced rate will only apply to those tickets marketed as children’s tickets. Additionally, the reduced rate will apply to the whole of the cost of a ‘family’ ticket, provided this includes the right of admission for at least one child.

3. Attractions that are suitable for families with children

The reduce rate applies to charges made for a right of admission for any customer regardless of age.

HMRC has specifically mentioned the following venues as being within the scope of the reduced rate:

• amusement parks and fairs, including water parks and theme parks (excluding pay-per-ride attractions)
• circuses
• adventure parks, including outdoor adventure centres
• museums and similar cultural facilities, including planetariums, heritage sites, nature reserves and botanical gardens
• zoos, aquariums, wildlife parks and farm visitor attractions
• soft play centres, indoor bounce parks and indoor play facilities
• observation attractions, including viewing platforms, towers and observation wheels.

Impact on hospitality and tourism businesses

Whilst the changes provide good PR for the Government at a time when that appears to be lacking, the benefits to the public appear to be fairly small, an average saving of only £10 per household.

The announcement will create an expectation in the public’s mind that they will benefit directly by restaurants and attractions passing on the reduced VAT in the form of lower prices. However, this will come with an increase in the administrative burden carried by those businesses.

For example, some careful changes to a restaurant’s EPOS system will be required to ensure compliance with the legislation. Whilst the reduced rate applies to a children’s meal supplied at a single inclusive price, optional or add on items, priced separately remain chargeable at the normal rate of VAT. Normal VAT treatment also applies to children’s takeaway meals.

Attraction operators will also need to decide if they meet the criteria to apply the reduced rate to their entrance prices. For example, is a garden marketed as being suitable for families with children able to apply the reduced rate. The guidance provided by HMRC indicates that only botanical gardens qualify.

If prepaid tickets have been issued, then this will also add to the administrative burdens. The Government has indicated that it expects customers to be refunded any additional VAT paid on an advance ticket where the admission takes place between 25 June 2026 and 1 September 2026. Whilst this is not legally binding, businesses that seek to recoup the overpaid VAT from HMRC via the error correction process but not refund their customers will need to consider HMRC’s powers on unjust enrichment. Those businesses will need to look carefully at their terms and conditions.

Will the changes benefit businesses?

It is to be hoped that those businesses affected by the change will see an overall increase in footfall and income from now until 1 September that compensates for the necessary additional administrative and compliance work.