The UK government has introduced a temporary VAT cut from 20% to 5% on a range of family-friendly activities, including cinema, theatre, attractions and children’s meals, running from 25 June 2026 until 1 September 2026. Businesses may choose to pass on the reduced rate, and the scheme also offers free local bus travel for children in England during August.
The VATfaqs digest
Global VAT news, delivered Tuesday and Thursday. Free, curated from 50+ official sources, no spam.
No spam · Unsubscribe any time
Withers · about 6 hours ago
The Court of Appeal ruled that public funds paid to further education institutions are third‑party consideration for the supply of education, placing them within the scope of VAT but exempt. HMRC accepts the judgment, will not pursue a further appeal, and maintains the current position pending consultation, meaning institutions can continue their existing VAT treatment until any future policy change applies prospectively.
VATIT · about 9 hours ago
HMRC has replaced its default surcharge system with a points‑based penalty regime effective 1 January 2023. Late submissions accrue one penalty point each, with a £200 financial penalty triggered at filing‑frequency thresholds, while late payments incur percentage‑based penalties and interest at the Bank of England base rate plus 4%. Businesses must appeal within 30 days of a penalty notice and can reset points after a compliance period.
Guardian · 3 days ago
The UK government has announced a temporary reduction in VAT on children’s meals from 20% to 5% for the period 25 June to 1 September 2026, as part of the Great British summer savings scheme. Pubs and restaurants are already devising menus to take advantage of the discount, while industry leaders criticize the measure as a token gesture. The scheme also applies to cinema and theatre tickets and family attractions, with an estimated cost to the Treasury of £10.5 bn to £13 bn.
ICAEW · 4 days ago
The UK will apply a temporary 5% VAT rate to children’s meals and family‑friendly entertainment from 25 June to 1 September 2026. The guidance clarifies eligibility, exclusions such as sports events, and that businesses are not obliged to pass the cut on to consumers.
VatCalc · 7 days ago
The UK Court of Appeal on 12 June 2026 ruled that Bolt cannot use the Tour Operators Margin Scheme (TOMS) and must charge full 20% VAT on the entire fare. This reverses earlier tribunal decisions that had allowed Bolt to apply TOMS. The ruling has implications for other ride‑sharing operators such as Uber.
TaxPolicy · 8 days ago
A proposed permanent reduction of the UK hospitality VAT rate from 20% to 10% would cost an estimated £12‑14 bn per year, with the bulk of the benefit accruing to large chains such as McDonald’s. The analysis argues the cut is mis‑targeted, unlikely to lower prices, and would create incentives for businesses to re‑characterise activities to qualify for the lower rate. It suggests alternative measures—such as business‑rate reform or NIC relief—would better support the sector.
Put your brand alongside trusted tax-tech intelligence across 150+ countries.
Key Takeaways
The VAT rate is reduced to 5% from 25 June 2026 to 1 September 2026.
Children’s and family tickets for cinemas, theatres, concerts, shows, exhibitions; admission tickets for attractions (amusement parks, zoos, soft play centres, nature reserves, wildlife parks); and children’s meals in restaurants (must be advertised and priced as a child’s meal, eaten in a restaurant or cafe, no alcoholic drinks).
No, there is no legal requirement; businesses may choose to apply the reduced rate.
Meals must be advertised and priced as a child’s meal, eaten in a restaurant or cafe, cannot include alcoholic drinks, and takeaways are excluded.
During August 2026 for children aged 5‑15 in England (excluding London).
Primary source
Read the full article at GuardianThis summary was published on VATfaqs.com on 20 June 2026. It relates to VAT developments in United Kingdom. The original source is Guardian.
