Temporary 5% VAT Cut for Family Attractions and Children’s Meals: What Businesses Need to Do

The Chancellor has announced a temporary VAT cut for selected family-focused spending over the 2026 summer holiday period. For affected businesses, this is not just a pricing decision. It is also a VAT coding, bookkeeping, invoicing and record-keeping issue.

From 25 June to 1 September 2026, some children’s meals, children’s tickets, family tickets and qualifying family attraction admissions may use a temporary 5% VAT rate instead of 20%. Businesses should check eligibility, update VAT codes, separate qualifying and non-qualifying sales, and keep clear records.

From 25 June 2026 to 1 September 2026 inclusive, HMRC says a temporary reduced VAT rate of 5% will apply to certain supplies of children’s meals, children’s tickets and admission to some family attractions. The change is intended to replace the normal 20% standard rate for supplies that fall within scope during that period.

There is one important legal caveat. HMRC’s Revenue and Customs Brief says the change is subject to the relevant statutory instrument being made and coming into force, and that the brief reflects the law as HMRC expects it to apply once enacted. That means businesses should prepare now, but should still check the final legislation and any updated HMRC guidance before filing VAT returns or making complex decisions.

This guide explains what affected businesses should consider before applying the temporary 5% VAT rate.

Which businesses may be affected?

HMRC says the temporary reduced rate is relevant to businesses making consumer-facing supplies to families with children during the school summer holidays. This includes restaurants, cafés, cinemas, theatres, exhibition venues, performance venues, amusement parks, theme parks, adventure parks, water parks, zoos, animal attractions, soft play centres, observation attractions, museums and similar cultural attractions.

The key point is that the reduced rate does not apply simply because a business serves families. It applies only where the specific supply falls within HMRC’s described categories.

A restaurant may have some sales at 5% and others at 20%. A cinema may have children’s tickets at 5% but adult tickets at 20%, unless sold as part of a qualifying family ticket. An attraction may be able to apply 5% to admission but still charge normal VAT rates on food, merchandise, upgrades and other separately supplied items.

For most affected businesses, the practical challenge will be separating eligible and non-eligible income clearly enough for pricing, till reports, bookkeeping and VAT returns.

The first step: identify exactly what you sell

Before changing prices or VAT codes, businesses should list their sales categories and decide which ones may qualify.

For example, a family attraction might sell:

• single-entry admission tickets
• family admission tickets
• annual passes or season tickets
• children’s party packages
• café food and drink
• children’s meals
• adult meals
• gift shop items
• parking
• optional upgrades
• pay-per-ride activities
• school trip packages
• gift vouchers

Not all of these will necessarily have the same VAT treatment. HMRC’s brief says the reduced rate applies only to the charge for the right of admission for qualifying attractions. Goods or services supplied separately, such as food, merchandise or upgrades, remain subject to their normal VAT treatment.

That means a business should not simply change its whole sales system to 5% VAT. The safer approach is to review each income stream and create separate VAT codes where needed.

Children’s meals: when the 5% rate may apply

For restaurants, cafés and similar catering establishments, HMRC says the reduced rate applies to children’s meals where two conditions are met.

The meal must be held out for sale only as a meal for children, and it must be supplied as part of catering services by a restaurant, café or similar establishment for consumption on the premises. HMRC says this depends on how the meal is marketed, presented and priced, rather than who actually eats it. A distinct children’s menu is given as an example of the type of presentation that may support the treatment.

This distinction is important. HMRC says the reduced rate does not apply to meals marketed as smaller portions, lower-calorie options, discounted adult meals, or shared meals intended for adults and children. Takeaway meals also do not qualify for the temporary reduced rate.

In practice, a children’s menu should be clearly separated from the adult menu. If the same dish appears on both menus, the children’s version should normally be differentiated by price and/or portion size, but HMRC also says portion size alone is not the determining factor.

Where a children’s meal is sold for a single inclusive price, such as a main meal, drink and dessert, HMRC says the whole package can qualify for the reduced rate. However, optional add-ons or upgrades priced separately may keep their normal VAT treatment.

This means restaurants should review their menus before the scheme starts. If a children’s meal deal is intended to qualify, the menu, till button and receipt description should all support that treatment.

Tickets for cinemas, theatres, shows, concerts and exhibitions

For cinemas, theatres, concerts, exhibitions and shows, the temporary 5% rate is narrower than many businesses may first assume.

HMRC says the reduced rate applies to children’s admission tickets to cinema screenings, theatrical performances, shows, concerts and exhibitions. A children’s ticket is one held out for sale only as a right of admission for a child, based on how it is marketed, priced and presented.

Where tickets are sold separately for adults and children, only the children’s tickets qualify. Adult tickets remain standard-rated.

However, HMRC says that where a ticket is held out for sale as a family admission and includes one or more children, the reduced rate can apply to the whole ticket, including adult admissions within that family package. Standalone group tickets that are not held out as family admissions do not qualify.

This makes ticket labelling very important. A “family ticket” should be clearly described as a family admission package. A generic “group ticket” is unlikely to have the same treatment unless it meets the specific conditions.

Venues should review their booking systems and ticket categories before applying the reduced rate. If the sales platform simply has “standard ticket” and “concession ticket”, that may not be enough to support the reduced rate for adult sales.

Family attractions: wider relief for admission tickets

The rules are broader for certain family attractions.

HMRC says the reduced rate applies to charges for a right of admission for any customers, regardless of age, to qualifying attractions suitable for families with children. The list includes amusement parks and fairs, water parks, theme parks, circuses, adventure parks, museums and similar cultural facilities, planetariums, heritage sites, nature reserves, botanical gardens, zoos, aquariums, wildlife parks, farm visitor attractions, soft play centres, indoor bounce parks, indoor play facilities, observation towers, viewing platforms and observation wheels.

For these attractions, the 5% rate can apply to adult admission as well as child admission, provided the supply is an admission charge to a qualifying attraction and is not already exempt from VAT.

HMRC also makes clear that sport is not included. The reduced rate does not apply to admission to sports events, use of sports facilities, or participation in sport or physical recreation. Some sports supplies may instead be exempt under separate VAT rules, but they are not brought into this temporary 5% relief by the summer scheme.

This distinction matters for mixed venues. A leisure centre with soft play, swimming, fitness classes and sports courts may need to treat different activities differently. A soft play admission may fall within scope, while sports participation may not.

Season tickets, annual passes and repeat-entry tickets

Businesses should be careful with season tickets and repeat-entry passes.

HMRC says that if a ticket permits repeat entries outside the period from 25 June 2026 to 1 September 2026, it will not qualify for the relief unless it is priced the same as a standard single-entry ticket. Repeat-entry tickets used solely within the relief period can qualify.

This means annual passes, season tickets and memberships need a separate review. A business should not assume that a pass sold during the summer automatically qualifies for the 5% rate.

For example, a standard day ticket to a theme park for admission on 10 August 2026 may qualify. A summer-only multi-entry pass that is valid only during the relief period may also qualify if it meets HMRC’s conditions. But an annual pass allowing entry beyond 1 September 2026 would generally not qualify unless it is the same price as a standard single-entry ticket.

From a bookkeeping perspective, it may be sensible to separate:

• single-entry tickets within the relief period
• family admission tickets within the relief period
• repeat-entry tickets only valid within the relief period
• annual passes and season tickets extending beyond the relief period
• gift vouchers
• deposits and advance bookings

This will make the VAT return easier to support if HMRC later asks how the 5% rate was applied.

Advance bookings and prepayments

Advance bookings are likely to cause confusion.

HMRC says the reduced rate applies to supplies of a right of admission for a date falling between 25 June 2026 and 1 September 2026 inclusive. Tickets bought during the reduced-rate period for admission on or after 2 September 2026 remain subject to the standard rate.

HMRC also says that where supplies are paid for in advance, businesses may opt to apply the lower rate in keeping with the existing change-of-rate provisions. This can include prepayments made before the announcement. Where a business has already accounted for VAT at 20% and later chooses to apply the 5% rate, HMRC says the business should make the necessary VAT account adjustments, and the government would expect customers who prepaid to be refunded for additional VAT paid.

This is one of the most important admin points for affected businesses.

A business may need a process for:

• identifying eligible advance bookings
• checking whether VAT was already accounted for at 20%
• deciding whether to apply the 5% rate retrospectively
• issuing refunds or credit notes where appropriate
• adjusting VAT records
• keeping a clear audit trail

HMRC’s general VAT guidance says that normal tax point rules are important when there is a change in VAT rate, and that businesses may use special change-of-rate provisions in some cases.

For practical purposes, businesses should be consistent. If a business chooses to apply the lower rate to eligible prepayments, it should record how it identified the affected sales and how any adjustments were calculated.

VAT codes and till setup

The temporary 5% rate will be easiest to manage if businesses create specific sales categories instead of manually adjusting VAT later.

For example, a restaurant might create separate till buttons for:

• children’s meal — 5%
• children’s meal add-on — 5%, where eligible
• adult meal — 20%
• takeaway meal — normal VAT treatment
• alcoholic drink — 20%
• children’s menu drink included in meal deal — 5%, where part of the qualifying package

A theatre or cinema might create:

• child ticket — 5%
• adult ticket — 20%
• family ticket — 5%, where it meets the conditions
• group ticket — 20%, unless it clearly qualifies
• merchandise — normal VAT treatment

A family attraction might create:

• qualifying admission — 5%
• parking — normal VAT treatment
• food and drink — normal VAT treatment
• gift shop — normal VAT treatment
• optional upgrade — normal VAT treatment
• season pass — reviewed separately

The aim is to avoid mixing 5% and 20% sales under the same product code. If the sales report is unclear, the VAT return becomes harder to support.

Pricing: should businesses pass on the VAT saving?

The government says it expects qualifying businesses to pass the savings on to families by lowering prices on eligible children’s meals and tickets, so that the VAT cut is reflected directly at the till.

However, a VAT cut does not automatically change the advertised price unless the business decides to change it. Businesses will need to decide whether to pass on the full saving, part of the saving, or keep prices unchanged and use the VAT reduction to support margins.

That decision is commercial, but it should be made carefully. If a business advertises that the VAT saving has been passed on, the pricing should match that claim.

For example, if a ticket currently costs £120 including VAT at 20%, the pre-VAT price is £100 and the VAT is £20. If the same £100 net price is charged at 5% VAT, the customer price becomes £105. The visible saving is £15, not £18 or £20.

This is because the VAT reduction is calculated on the net price, not simply removed as 15% of the gross price.

A simple calculation is:

Current VAT-inclusive price ÷ 1.20 = net price
Net price × 1.05 = new VAT-inclusive price at 5%

So a £60 VAT-inclusive ticket becomes £52.50 if the full VAT saving is passed on.

Businesses should also check whether existing advertising, vouchers, online prices and booking platforms can be updated in time. A mismatch between advertised prices, online checkout prices and till prices could create customer complaints.

Bundles and mixed supplies

Bundles are another area where businesses need to be careful.

HMRC says that where admission, meals or tickets are supplied together with other goods or services for a single price, businesses should continue to apply normal VAT rules to determine the correct liability. Only the part of the supply covered by the temporary relief may be eligible for the reduced rate; other elements should be treated according to their normal VAT liability.

This could affect party packages, family deals, meal-and-ticket bundles, attraction-and-food packages, VIP upgrades and birthday packages.

For example, a soft play centre may sell a birthday party package including admission, food, party bags and extras. Some parts may potentially fall within the temporary reduced rate, while others may remain standard-rated or follow their normal VAT treatment.

A business should not assume that calling something a “family package” makes the entire package 5% VAT. The nature of the supply still matters.

Where a bundle contains both qualifying and non-qualifying items, the business may need to apportion the price between different VAT liabilities. HMRC’s main VAT guide includes a section on apportionment of output tax for multiple supplies.

Input VAT: do not reduce supplier VAT yourself

The temporary 5% rate concerns output VAT on eligible sales. It does not mean every related cost becomes 5%.

HMRC’s general VAT guidance says that when reclaiming input tax after a change in VAT rate or liability, businesses must reclaim input tax at the rate charged by the supplier. If a supplier’s VAT invoice shows VAT at the old rate, the business can treat only the actual VAT shown as input tax.

This means a restaurant, cinema or attraction should not reduce input VAT claims just because some sales are now at 5%. Input VAT should follow supplier invoices and the normal rules on recoverability.

If supplier invoices show 20% VAT on standard-rated costs, the business normally records the input VAT shown, subject to the usual VAT recovery rules. The temporary relief does not turn ordinary business costs into 5% purchases.

VAT returns and record keeping

Businesses should make sure the VAT return is supported by clear sales reports.

HMRC’s general guidance says businesses must continue to account for VAT in the period in which the normal tax point occurs, even where special rules are used for deciding the VAT rate to charge. HMRC also says the amounts shown on the VAT return should not be split between old and new rules simply because a rate change has occurred.

In practical terms, the VAT return still needs to be prepared from the business’s accounting records. The temporary 5% sales should feed into the VAT return correctly, but the business should keep enough supporting detail to explain how the figures were calculated.

A good record-keeping approach would include:

• a list of products or services treated as 5%
• the reason each category was treated as eligible
• copies of children’s menus, ticket descriptions and family ticket wording
• sales reports showing 5% and 20% VAT separately
• records of advance booking adjustments
• records of refunds or credit notes
• notes of any judgement calls made
• copies of HMRC guidance relied on at the time

This is especially important because the relief is temporary. When the period ends, businesses will need to switch back to the normal VAT treatment.

What should businesses do before 25 June 2026?

The businesses most likely to be affected should use the period before 25 June to prepare their systems and staff.

The first step is to review sales categories. Identify which sales might qualify for 5%, which clearly remain at 20%, which are exempt or zero-rated, and which need more technical review.

The second step is to update systems. Tills, EPOS systems, booking platforms, e-commerce checkouts, accounting software and VAT codes may all need changes. The changes should be tested before the start date.

The third step is to review pricing. Decide whether the VAT saving will be passed on in full, partially passed on, or retained. If prices are changing, update websites, menus, printed materials, ticket pages and adverts.

The fourth step is staff training. Staff should know which products qualify and should understand that not everything becomes 5%. Front-of-house teams may also need a simple explanation for customers.

The fifth step is to plan the change back. The temporary period ends on 1 September 2026 inclusive, so businesses should schedule a reverse change from 2 September 2026 for supplies outside the relief period.

Common mistakes to avoid

One likely mistake is applying 5% VAT to all restaurant meals. The relief is aimed at qualifying children’s meals consumed on the premises, not adult meals, takeaway meals, or smaller adult portions.

Another likely mistake is applying 5% VAT to all cinema or theatre tickets. For these venues, HMRC says the reduced rate applies to children’s tickets and qualifying family tickets, while standalone adult admissions remain standard-rated.

A further mistake is applying 5% VAT to annual passes that extend beyond the relief period. HMRC says repeat-entry tickets outside the relief period will not qualify unless priced the same as a standard single-entry ticket.

Businesses may also forget separately supplied extras. Admission might qualify, but food, merchandise, parking or upgrades may not.

Finally, businesses should avoid vague product descriptions. “Meal deal”, “group ticket” or “standard admission package” may not provide enough evidence if the VAT treatment depends on whether the item was marketed, priced and presented as a children’s meal, children’s ticket, family ticket or qualifying attraction admission.

A simple action checklist

Before the reduced rate begins, affected businesses should consider the following checklist:

1. Confirm whether the business sells supplies within HMRC’s temporary relief categories.
2. Separate qualifying and non-qualifying income streams.
3. Review children’s menus, ticket wording and family ticket descriptions.
4. Create separate VAT codes for 5% sales.
5. Test tills, booking systems and online checkouts.
6. Decide how much of the VAT saving will be passed on to customers.
7. Update menus, price lists, websites and adverts.
8. Review advance bookings and prepayments.
9. Create a process for refunds, credit notes or VAT adjustments where needed.
10. Train staff before 25 June 2026.
11. Keep copies of sales reports and guidance relied on.
12. Schedule the return to normal VAT treatment from 2 September 2026.

The Accensia view

The temporary 5% VAT cut could be useful for businesses that rely on summer footfall, but it should be handled carefully.

For family attractions, the relief may be relatively straightforward where the main sale is admission to a qualifying attraction. For restaurants, cafés, cinemas and theatres, the position may be more mixed because some sales qualify and others do not.

The biggest risk is over-applying the reduced rate. A business that changes too many sales to 5% could underpay VAT. A business that fails to update its systems correctly could overcharge customers or create messy VAT records.

The safest approach is to prepare a short internal VAT treatment schedule before the start date. List each product, ticket or package, state the VAT rate being applied, and keep a note of why. That gives the business, bookkeeper or accountant a clear working document for the summer period.

Because HMRC has said the measure is subject to the relevant statutory instrument being made and coming into force, businesses should also check for final legislation and updated HMRC guidance before relying on the treatment for VAT return purposes.

This is a temporary relief, but it still needs permanent-quality records.

This guide is based on HMRC’s Revenue and Customs Brief 5 (2026), HM Treasury’s Great British Summer Savings fact sheet, and HMRC VAT Notice 700. At the time of writing, HMRC states that the temporary reduced rate is subject to the relevant statutory instrument being made and coming into force. Businesses should check the final legislation and updated HMRC guidance before making VAT return adjustments.