VAT update for hospitality and leisure businesses

Temporary 5% VAT Rate for Children’s Meals and Family Attractions.

HMRC has introduced a temporary reduced rate of VAT for selected family-focused meals, tickets and attractions during summer 2026. The rules are useful, but they are narrow.

Quick answer.

A temporary 5% VAT rate applies from 25 June 2026 to 1 September 2026 inclusive for certain children’s meals, children’s tickets, qualifying family tickets and admission to specified family attractions. This is not a blanket VAT cut for hospitality, leisure or tourism businesses.

For cafés, restaurants, cinemas, theatres, soft play centres, zoos, visitor attractions and similar businesses, the summer 2026 VAT change may look straightforward at first glance.

In practice, it needs careful handling.

The reduced rate only applies where the supply meets HMRC’s conditions. That means businesses may need to review menus, ticket categories, booking systems, VAT records, receipts, advance bookings and mixed packages.

The biggest risk is applying the 5% VAT rate too widely.

If the wrong VAT rate is applied, the problem may not show until the VAT return is prepared, or until HMRC asks questions later. If your systems are already being reviewed for digital record keeping, it is also worth checking whether your accounting software is set up correctly. We have covered this wider point in our guide to choosing HMRC-compliant Making Tax Digital software.

At a glance.

Who could be affected?

HMRC’s tax information note says the measure affects businesses supplying qualifying children’s meals to eat on their premises and qualifying tickets for admission to certain attractions or events.

Children’s meals: what qualifies.

The reduced rate can apply to children’s meals where both of the following conditions are met:

This means the way the meal is marketed, priced and presented matters.

A dedicated children’s menu will usually be clearer than a general “small plate” or discounted adult meal. HMRC’s Revenue and Customs Brief 5 (2026) makes clear that a smaller portion, lower-calorie option or discounted adult meal does not automatically become a children’s meal.

A qualifying children’s meal can include a non-alcoholic drink where that drink forms part of the meal. However, optional extras, add-ons or upgrades may need to be treated separately if they do not form part of the qualifying children’s meal package.

For wider guidance on food and catering VAT rules, businesses can also refer to HMRC’s Food products VAT Notice 701/14 and Catering and takeaway food VAT Notice 709/1.

Children’s tickets and family tickets.

A general group or multi-person ticket will not automatically qualify simply because a family buys it. The wording, ticket category and presentation matter.

If the admission may already fall within an exemption, especially for certain cultural bodies, HMRC’s VAT Notice 701/47 on admission charges to cultural events is also relevant.

Family attractions: wider than children’s tickets.

For specified family attractions, the reduced VAT rate can apply to admission charges for any customer, regardless of age.

Only the admission charge is within scope. Food, merchandise, upgrades and separately charged extras need their own VAT treatment. HMRC’s wider guidance on VAT on admission charges to attractions may also be useful when reviewing attraction income streams.

What stays outside the temporary VAT cut.

The temporary reduced rate does not cover every sale made by a hospitality, tourism or leisure business. HMRC’s general guidance on VAT rates on different goods and services remains relevant where a supply falls outside the temporary measure.

Bundles and mixed supplies.

Many businesses will not just sell one simple product.

A family attraction may sell admission, food, souvenirs, fast-track access and activity upgrades. A theatre may sell tickets, programmes, drinks and merchandise. A restaurant may sell children’s meals, adult meals, add-ons and takeaway options.

HMRC’s guidance says normal VAT rules continue to apply where admission, meals or tickets are supplied together with other goods or services for a single price. HMRC’s VAT guide remains the starting point for wider VAT accounting principles.

This is also where VAT structuring and business model questions can become more important. For example, Property Tax Advice has previously covered VAT disaggregation, which is a different issue, but still relevant where businesses operate multiple connected activities and need to be careful about how HMRC may view their structure.

Advance bookings and timing.

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 temporary period for admission on or after 2 September 2026 remain subject to the standard rate, unless another VAT rule applies.

Where supplies have been paid for in advance, businesses may need to consider HMRC’s change-of-rate rules. HMRC’s internal VAT time of supply manual explains that special change-of-rate rules can be optional and adopted at the discretion of the supplier in certain circumstances.

For more detail, see HMRC guidance on supplies affected by a change in VAT rate or liability.

Should businesses pass the saving on?

The policy objective is to reduce the cost of selected activities and services for families during the summer holiday period.

From an accounting point of view, the key issue is that the VAT must be recorded correctly, whatever pricing decision is made.

Businesses should also be careful with customer messaging. If you advertise a VAT saving or summer discount, make sure the products, meals or tickets being promoted actually qualify.

Before changing your VAT codes, check these.

If your business may be affected, the following checks are worth making now:

If you use mileage claims, fuel records or mixed cost recharges in the same accounting system, it is also worth making sure your VAT recovery process is clean. We have covered this separately in our guide to claiming VAT on mileage.

Why this matters.

Temporary VAT changes can create more admin than expected.

The rate change itself is simple: 20% becomes 5% for qualifying supplies during the relevant period.

The difficult part is working out exactly which supplies qualify and making sure your systems reflect that correctly.

For a small café with a clear children’s menu, the change may be relatively straightforward. For a visitor attraction selling memberships, season passes, family tickets, event add-ons, food, drink and merchandise, the VAT treatment may be more involved.

The safest approach is to review the detail before making changes, rather than correcting mistakes later.

Related reading.

If this temporary VAT change affects your business, these pages may also be useful.

Need help checking your VAT position?

If your business sells children’s meals, family tickets or admission to attractions, now is the time to check that your VAT codes, booking systems and records are ready for the temporary change.

RiverView Portfolio can help you review the VAT treatment and make sure your accounting records are set up correctly.

Speak to the RVP team

Local business support.

Businesses in Swindon and Wiltshire may also find the Swindon and Wiltshire Growth Hub useful for wider business support, events and resources.

Useful official guidance.

You can read HMRC’s guidance here:

• HMRC Revenue and Customs Brief 5 (2026)
• HMRC tax information note: Temporary reduced rate of VAT for children’s meals and family attractions
• Catering and takeaway food VAT Notice 709/1
• Admission charges to cultural events VAT Notice 701/47

FAQs.