Temporary 5% VAT Rate for Children’s Meals and Family Attractions – What Businesses Need to Know

A temporary reduction in VAT from 20% to 5% has been announced on certain children’s meals, tickets and family attractions from 25 June to 1 September 2026.

The relief is designed to encourage spending within the hospitality and leisure sectors, which will hopefully help some businesses, although the administration could be problematic.

Qualifying supplies include:

• Children’s meals sold from dedicated children’s menus

• Children’s admission tickets

• Certain family attractions such as theme parks, zoos and soft play centres

However, the rules are narrower than many businesses may expect. Adult meals and tickets generally remain standard-rated, and takeaway children’s meals do not qualify.

Administrative challenges for businesses

While the temporary VAT reduction, which was very helpful to hospitality during COVID, was relatively straightforward because it applied broadly across hospitality, this new relief is far more selective.

Many businesses will now need to operate different VAT rates simultaneously, for example:

• Adult meals at 20%

• Children’s meals at 5%

• Takeaway meals at 20%

• Family admissions at 5%

This creates several practical issues, including:

1)      EPOS and till updates

Businesses will need to ensure systems are correctly configured to avoid VAT errors.

2)      Staff training

Team members must understand which products qualify and how to process mixed transactions correctly.

3)      Bundled offers

Meal deals, family packages and combined admissions will need to be studied to ensure the correct VAT treatment on all.

4)      Advance bookings

The timing of admissions and prepayments may affect which VAT rate applies. Receipt of payment generally creates a tax point if that is before the event itself.

5)      Product descriptions

HMRC has confirmed that how items are marketed and presented to customers can affect eligibility.

Practical steps businesses should take

Businesses should consider:

• Reviewing qualifying products and services

• Updating accounting and till systems

• Training staff before implementation

• Keeping clear records of VAT decisions

• Monitoring VAT reporting carefully during the temporary period

Although the reduced rate may help attract customers during the summer, many businesses will need to balance the potential benefit against the additional administrative burden.   

While the Government expects qualifying businesses to pass the 15% VAT saving directly onto customers under the scheme, it is not mandatory.  They will need to decide whether to reduce their prices to reflect the reduction in VAT, or retain their prices to counter the increased admin.

If you would like support reviewing how the temporary VAT changes affect your business, please get in touch. We are here to help.