22 May 2026

The Government has announced a temporary VAT reduction to help make family activities more affordable during the 2026 summer holidays. Whilst this gives the opportunity to help families' budgets, it creates some practical headaches for businesses.

From 25 June to 1 September 2026, VAT on certain summer holiday activities will be reduced from 20% to 5%. There are three areas where the relief can apply, and each comes with important rules and exclusions:

1. Children’s meals

The 5% rate of VAT is only available for meals held out for sale as being for children – for instance as a children’s menu. Simply advertising as a smaller portion (which might appeal to adults as well as children) won’t make the meal eligible for the 5% VAT rate. The same applies for drinks – if they are sold as part of a children’s menu, or a children’s meal package they can qualify for the 5% VAT rate, but if selected from the adult menu, they would not qualify for the 5% rate of VAT. The meal must also be for eating on premises - the relief isn’t available for takeaway food.

2. Children’s cinema and theatre tickets

This relief is for children’s admission tickets to

  • Cinema screenings
  • Theatrical performances, shows and concerts, and exhibitions

As with the children’s meal relief, the ticket must be held out for sale as a children’s ticket. If a venue for instance sells a general admission ticket, and does not have a children’s ticket option (e.g. children and adults purchase the same entry ticket) then the 5% rate cannot be used, even if an admission ticket is to be used by a child.

However, if a family ticket is offered, which is advertised as allowing entry for one or more children, the whole family ticket price can be eligible for the 5% VAT rate, including the element of the price that is for the admission of the adults in the family party.

3. Admission to certain attractions

The third relief is a little wider, covering admission for any visitors (both adults and children) to a qualifying attraction that is suitable for families with children. The attraction must be of one of the following types to qualify:

  • 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

The relief only applies to entry, so if, for instance merchandise or food is sold to visitors, then that will be subject to the normal VAT rules (remembering that if children’s meals are provided then they could qualify for the 5% rate under the children’s meals relief).

There are other important points to bear in mind, which apply to all three strands of the relief:

  • The relief doesn’t apply to sport - either spectator or participation fees
  • If admission, meals or tickets that qualify for the 5% rate are provided as part of a package alongside elements that don’t qualify for the relief, an apportionment of the total ticket price will normally need to be done to work out the part that qualifies for the 5% rate
  • If an advance deposit has been taken for a supply that is covered by the relief, VAT is likely to have already been accounted for at 20%. The business can decide whether to adjust the VAT rate on that supply to 5% or to leave the VAT unadjusted
  • The relief is only available for admission between 25 June 2026 and 1 September 2026. If, for instance, a ticket is sold in summer 2026 for admission on 2 September 2026, then it is still subject to VAT at 20%

Whilst this could be a boon for families struggling with cost-of-living pressures, the rules may be quite complex to implement for businesses. Setting up till or accounting software to work out VAT at the right rate will be tricky, as will working out which items of income are eligible for the reduced rate of VAT. Many businesses may already have set pricing for the summer, marketed ticket prices, printed tickets etc., so this late change could present logistical problems.

If you would like to discuss any of this article further, please contact your usual Dodd & Co adviser or email hello@doddaccountants.co.uk.