Temporary VAT reduction for family activities: What hospitality businesses need to know

The announcement are part of the Government’s “Great British Summer Savings” initiative, with ministers promoting the scheme as a way to lower the cost of family days out and children’s meals during the school holidays.

Here, our VAT Consultant, Nicola Gladwell summarises the changes, key considerations and what it means for hospitality businesses.

Will families actually see lower prices?

A key point often overlooked in the Government’s publicity is that businesses are not legally required to pass on the VAT saving to customers. While the Government has stated that it expects businesses to do so, the decision ultimately rests with individual operators.

If the full VAT reduction is reflected in prices, the saving equates to approximately £12.50 for every £100 spent. Government examples suggest savings ranging from around £2 on children’s meals or soft play admissions to £20 on family theme park tickets.

However, given the public messaging surrounding the announcement, many customers are likely to expect lower prices. Businesses may therefore feel commercial pressure to pass on some or all of the VAT saving, even where margins are already under strain.

Challenges for charities and exempt admissions

The temporary relief may create particular difficulties for charities and other organisations whose admissions are already exempt from VAT.

Because these businesses do not charge VAT on admissions in the first place, they cannot benefit from the reduced rate and therefore may be unable to reduce prices. This distinction receives little attention in the Government’s public-facing guidance and could lead to confusion among visitors who expect discounts that cannot be offered.

Affected organisations may wish to prepare clear messaging for customers, including:

• Website notices
• FAQs for customer service teams
• Signage at venues

Explaining that admission charges are already VAT-exempt may help manage expectations and avoid complaints. Some organisations may nevertheless consider offering voluntary discounts to remain competitive during the summer period.

Children’s meals

Restaurants, cafés and similar establishments can apply the reduced 5% VAT rate to qualifying children’s meals consumed on the premises.

To qualify, the meal must be:

• Marketed as a children’s meal
• Priced as a children’s meal
• Presented as a children’s meal

Importantly, eligibility is determined by how the meal is sold rather than who consumes it.

The relief does not apply to:

• Standard adult meals purchased for children
• Smaller or discounted versions of adult meals
• Additional items purchased separately from the children’s menu

However, children’s meal deals and bundled children’s menu offerings can qualify in full.

Businesses that do not currently offer a dedicated children’s menu may wish to review their offering during the relief period.

Children’s and family tickets

The temporary reduced rate also applies to admissions for:

• Cinemas
• Theatres
• Concerts
• Exhibitions

A child’s ticket qualifies for the reduced rate. In addition, where a family ticket includes admission for at least one child, the entire family ticket can be subject to the 5% VAT rate.

Family attractions covered by the relief

The reduced rate applies to admissions to a range of family attractions, including:

• Theme parks
• Amusement parks
• Fairs
• Zoos
• Aquariums
• Wildlife attractions
• Circuses
• Museums
• Soft play centres
• Indoor play facilities
• Adventure attractions
• Observation attractions

Unlike the rules for children’s meals and entertainment tickets, the relief applies to all visitors regardless of age where the admission itself qualifies.

The reduced rate does not extend to:

• Food and drink purchases
• Merchandise
• Premium experiences or upgrades
• Sporting participation fees
• Admission to sporting events

Season tickets and repeat entry passes

Special rules apply to tickets that allow repeat visits beyond 1 September 2026.

Where a multi-entry or season ticket carries a premium price because it permits future visits after the relief period, it will generally not qualify for the reduced rate.

However, if a ticket is sold at the same price as a standard single-entry admission and simply allows additional visits at no extra cost, the reduced rate may still apply.

Multiple-entry tickets valid only during the qualifying summer period will generally benefit from the relief.

Advance ticket sales

The reduced rate applies not only to tickets sold during the relief period but also to tickets sold in advance for qualifying admissions taking place between 25 June and 1 September 2026.

This includes tickets sold before the Government’s announcement on 21 May 2026.

Businesses may therefore be able to retrospectively adjust VAT previously accounted for on qualifying advance sales.

The Government has indicated that it expects businesses to pass the resulting savings back to customers, although there is no statutory requirement to do so.