HM Revenue and Customs (HMRC) has confirmed a tax cut on summer holiday days out, trips, and attractions starting June 25 to help families save money this summer. The change will take effect next week and continue throughout the summer season.
Details of the VAT Reduction
From June 25 to September 1, the VAT rate on tickets for attractions including theme parks, zoos, museums, theatres, cinemas, and soft play centers will be slashed from 20% to 5%. Additionally, the cost of children's meals in restaurants and cafes will also benefit from the same reduced rate. The changes apply across the whole of the UK as part of a recently announced package to ease the impact of the cost of living crisis stemming from the Iran war.
Scope of the Scheme
The Great British Summer Savings scheme is described as a "targeted and temporary" initiative to help families enjoy days out together for less over the summer. It is estimated to cost around £300 million. HMRC published a policy paper on June 19 confirming the temporary VAT cut, with the reduced rate in place between June 25 and September 1 inclusive.
According to HMRC, the measure introduces a temporary UK-wide reduced rate of VAT of 5% on certain supplies in the hospitality and tourism sectors. This applies to qualifying children's meals for consumption on the premises and to certain rights of admission. For shows, exhibitions, theatres, concerts, and cinemas, it applies only to admissions sold as a child admission or as a family admission including one or more children. It also covers admission tickets for any customer to specified family attractions such as circuses, fairs, amusement parks, adventure parks, soft-play centers, zoos, observation attractions, farm visitor attractions, nature reserves, museums, and similar cultural facilities, subject to exclusions and conditions.
List of Eligible Items
The 5% VAT rate will apply across England, Wales, Scotland, and Northern Ireland to the following:
- Children's menu meals served in restaurants for consumption on the premises
- Children's and family tickets for cinemas, theatres, concerts, shows, and exhibitions
- Admission tickets for both children and adults to attractions including amusement parks, fairs, museums, zoos, soft play centers, circuses, adventure parks, nature reserves, wildlife parks, and observation attractions
Impact on Families
HMRC stated that the measure is expected to have a positive impact on individuals and households that purchase qualifying children's meals and admissions during the temporary reduced rate period, provided businesses pass on the VAT reduction in their prices. Individuals do not need to take any action other than familiarizing themselves with the changes. The measure is also expected to positively impact family formation, stability, or breakdown by potentially reducing the cost of certain meals and admissions.
The government expects businesses to pass on VAT savings to customers until the scheme ends on September 1. In England, the scheme also includes free bus travel for children aged between five and 15 during the school holidays in August to make it easier and more affordable for people to get out and about.
Prime Minister's Comments
Commenting on the scheme when it was announced in May, Prime Minister Keir Starmer said: "When I think about the summer holidays, I think about the Lake District — where I went as a child and later made memories with my own family. I know how precious that time is, yet too many parents feel they have to hold back because the cost of living is still squeezing budgets. This summer we're cutting the cost of a day out together - free bus travel for children aged five to 15 in England, and VAT slashed on a wide range of kid's attractions - so families can afford more time together."
