HMRC has updated its guidance on the temporary reduced rate of VAT for children’s meals, family attractions and tickets, just over a month after the measure came into effect.
Between 25 June and 1 September 2026, VAT on certain children’s meals and qualifying attractions is reduced from 20% to 5%, as part of a temporary government measure aimed at lowering the cost of family days out over the summer.
The updated guidance, published on 27 July, provides further detail on areas that had created uncertainty for businesses, including party packages, prepayments and mixed supplies.
It also confirms how the temporary rate interacts with existing VAT schemes. Businesses using the flat rate scheme should continue to apply their usual percentage when calculating their VAT liability, while supplies falling within the Tour Operators’ Margin Scheme are not eligible for the temporary 5% rate.
The update follows concerns from tax professionals about the practical difficulties businesses have faced in implementing the change at short notice.
Ed Saltmarsh, Tax Technical Manager at the Institute of Chartered Accountants in England and Wales, said businesses had already been dealing with challenges around updating systems, processes and customer-facing materials, as well as interpreting where the reduced rate should and should not apply.
He added that the need for HMRC to revise its guidance only a month after the policy took effect underlines the complexity of the measure.
For businesses in hospitality, leisure and tourism, the latest update is a useful reminder to review how the temporary VAT rate is being applied and make sure transactions are being treated correctly before the relief ends on 1 September.
