Chancellor announces VAT concessions for family summer fun

Chancellor Rachel Reeves has responded to ongoing cost of living pressures by announcing a cut in the rate of VAT on a range of children’s and family fun expenditure during the summer holiday period. 

From 25^th June to 1^st September, the VAT rate on children’s meals in restaurants and family leisure activities will be cut from 20% to 5% - including children’s and family tickets for cinema, theatre, exhibitions, shows and concerts; admission tickets for both children and adults to attractions such as amusement parks, fairs, circuses, museums, zoos, adventure parks, soft play and observation attractions; and admission tickets to theme parks, but not pay-per-ride attractions. 

Sports facilities are not included, although certain sports supplies are already exempt from VAT, such as when they are provided by eligible non-profit bodies. 

At the same time, the government announced that children aged between five and 15 will benefit from free bus travel during August. 

The government says it ‘expects’ businesses to pass on the VAT cut by lowering their prices, rather than maintaining existing prices in order to increase their margins. 

Businesses can apply the reduced rate on eligible sales for admission between 25^th June and 1^st September; sales already made before the measure was announced for the qualifying period are also eligible for the reduced rate of VAT, and businesses are encouraged to refund the saving to customers. 

Clearly a change announced at this late stage will require some action to implement, and HMRC has produced guidance, which is available here.