The UK Government has introduced the Great British Summer Savings Scheme, a temporary VAT reduction that lowers VAT from 20% to 5% on selected hospitality, leisure, entertainment, and attraction activities from 25 June 2026 to 1 September 2026. The initiative is designed to make family-focused activities more affordable during the summer holidays while encouraging increased customer spending and visitor numbers.

As this change will impact pricing, EPOS configuration, accounting treatment, and customer communications, all teams should review the guidance below and assess how the scheme applies to their business operations. Early preparation will help ensure compliance, minimise disruption, and allow businesses to maximise any commercial opportunities arising from the reduced VAT rate.

What the 5% VAT Rate Applies To

The reduced VAT rate applies only to specific categories:

1. Dining

• Children’s meals from dedicated children’s menus 
• Applies only when consumed on the premises (eat-in only) 

2. Attractions
Admission tickets (for both adults and children) to:

• Theme parks 
• Zoos and wildlife parks 
• Museums 
• Soft play centres 
• Heritage sites 

3. Entertainment
Children’s and family tickets for:

• Cinemas 
• Theatres 
• Live shows and concerts 
• Exhibitions 

Key Business Implications
(What You Need to Do)

If you operate in hospitality, leisure, or attractions, you should begin preparing your systems and pricing in advance to ensure compliance from day one of the scheme.

1. Confirm Eligibility of Sales

You should review your revenue streams and clearly identify which items qualify for the 5% rate, particularly:

• Children’s meals from a designated kids’ menu (eat-in only) 
• Eligible admission and entertainment tickets as defined above 

Non-qualifying items will remain at the standard 20%, including:

• Adult meals 
• Alcoholic drinks 
• Soft drinks 
• Merchandise and retail sales 
• Takeaway food 

2. Update EPOS and Accounting Systems

It is essential that your systems are updated before 25 June 2026.

Key actions:

• Create a dedicated 5% VAT tax code in your EPOS system 
• Map only qualifying items to the reduced rate 
• Ensure the system distinguishes between: 
  • Eat-in vs takeaway sales 
  • Children’s menu vs adult menu 
  • VAT rate differences on the same transaction where necessary 

You may need support from your EPOS provider or accountant to implement this correctly.

3. Update Marketing and Customer Communications

To avoid confusion and ensure compliance:

• Update menus, pricing boards, and websites in advance 
• Clearly show which items are included in the children’s VAT reduction 
• Ensure family ticket definitions (where applicable) are clearly communicated 
• Train staff so they can explain pricing changes confidently to customers 

Example for Cafés and Hospitality Businesses

For cafés, the reduced VAT rate applies only to:

• Eat-in children’s meals from a dedicated kids’ menu 

It does not apply to:

• Adult meals 
• Takeaway food 
• Soft drinks or alcoholic beverages (standard VAT remains at 20%) 

EPOS Setup Example

To comply with the scheme:

• Create a 5% VAT code in your system 
• Assign it only to eligible children’s dine-in menu items 
• Ensure takeaway orders automatically apply standard VAT 

Commercial Consideration

If you think the Great British Summer Savings Scheme may apply to your business, or you would like support assessing the impact on your VAT treatment, pricing, or systems, please contact us. We would be happy to discuss your circumstances and help you prepare for the introduction of the temporary 5% VAT rate.

Contact the T&G team on 01995 600600 to discuss how the Great British Summer Savings Scheme may affect your business.