A temporary reduction in VAT on some summer holiday items is here! It was announced by the government as part of its “Great British Summer Savings” campaign. It aims to make summer activities more affordable for families by reducing VAT from 20% to 5%.
Other parts of the campaign include free bus journeys for the under-16s in England during August and cuts to import taxes on some basic foods.
The 5% VAT rate means that trips to the cinema, zoo, theme parks and soft play areas could cost you less between 25 June and 1 September 2026. “Could” is the key word here.
What items will have their VAT slashed?
The temporary VAT reduction applies to selected family-friendly activities including:
Children’s meals in restaurants- Family and children’s cinema tickets
- Theatre and show tickets
- Theme parks and attractions
- Museums, exhibitions and adventure centres
- Zoos and wildlife parks
- Some soft play venues
The Treasury claims the scheme could shave around:
- £1.50 off a child’s cinema ticket
- Up to £17 off some family attraction visits
It’s not a huge amount of money, but it helps … if it happens.
Here’s the catch …
The reduced VAT rate of 5% definitely applies. However, businesses are not legally required to pass the VAT savings on to customers. So, do your homework before you set off.
‘Some venues may reduce prices. Others may not, using their extra margin to offset costs,’ explains Ugne, semi-senior accountant at re:accounts Chartered Accountants in Stevenage. ‘The hospitality and entertainment sectors are suffering from higher operating costs, staffing pressures and inflation. It must be tempting for businesses to syphon off some of the VAT savings. Many company owners are calling for the VAT reduction to be made permanent.’
Our tip? Shop around and compare prices. You should find a truly family-friendly activity.
Are you running a hospitality or leisure business?
It’s important to know the details involved as how you sell tickets or food impacts which VAT rate applies. It’s complex. For example:
- If a cinema sells adult and children’s tickets separately. Only the children’s tickets are subject to the reduced rate. Adult tickets remain standard-rated.
- If a theatre sells a family ticket (for example, two adults and two children) for a single price. As the package includes at least one child admission, the whole package is subject to the reduced rate.
- If a venue sells only standard admission tickets and does not offer tickets marketed as children’s admissions. All tickets remain standard-rated.
- If a ticket permits repeat entries outside the dates 25 June 2026 to 1 September 2026, then this will not qualify for the relief, unless the ticket is the same price as a single day entry.
Here are three steps to take:
- Make sure you understand exactly which supplies qualify.
- Review your pricing systems carefully.
- Check how VAT should be accounted for during the temporary period.
It’s important to think through what’s involved. Please don’t spoil your summer season by being asked awkward questions by HMRC.
Any questions?
To discuss the temporary VAT cut and explore other tax saving options, talk to our friendly tax experts at re:accounts Chartered Accountants. We love to cut through stuffy tax jargon and save money for our clients.
