27 May 2026
Leading independent specialist full-service accountancy firm Wbg has said that the temporary VAT relief announced for family holiday activities is a missed opportunity.
HMRC has announced that during the summer holiday period, a temporary 5% VAT rate will apply to: certain supplies of children’s meals; children’s admission to theatres, cinemas, concerts, exhibitions and shows, and all admission tickets to certain attractions suitable for families with children.
The 5% reduced rate will apply from 25 June 2026 to 1 September 2026.
HMRC has indicated that the attractions that will benefit from a wider relief (for both adults and children) include circuses, fairs, amusement parks, theme parks, adventure parks, water parks, zoos and other animal attractions, soft play centres, observation attractions, museums and similar cultural attractions.
Although HMRC has indicated that the intention of the measure is to reduce prices for families with children, it is not a requirement for businesses to pass the reduction in VAT to consumers, so although businesses may wish to incentivise sales by reducing prices, they may also see this as an opportunity to reduce costs, which was the approach taken by most businesses when the VAT rate for leisure and hospitality services was reduced during Covid.
Keith Miller, Wbg’s head of VAT, said: “However welcome a reduction in VAT might be, the measure feels like a missed opportunity, especially for a government under pressure to provide meaningful support to the hospitality sector.
“For starters, the measure introduces yet another layer of complexity to what is already a complicated sector when it comes to VAT. Also, the criteria for determining what falls within the measure will lead to an element of subjectivity if not confusion and will also result in anomalies in how the measure is applied.”
Miller says that key reason the measures being introduced are so disappointing is that they bring only partial relief to the hospitality sector/consumers yet bring avoidable complexity.
“A bolder option should have been considered that would benefit the entire hospitality sector, not just those businesses providing services to people with children, such as a reduced rate of VAT that applied to all hospitality services over the summer period,” he said.
“There will be accusations that it would cost too much to implement, but I would at least like to know if a wider measure was considered or might be considered in future, and that the numbers were crunched before the half-baked solution we’ve been presented with was arrived at.”
Miller’s suggestion would not necessarily be to apply 5% VAT across the entire sector, but perhaps a higher reduced rate such as the 12.5% VAT rate that was applied for a short period before the Covid VAT reliefs for the hospitality sector were removed in April 2022.
He says that in applying the 20% standard-rate of VAT to our hospitality sector, the UK has for a long time been out of line with the rest of Europe, where most countries have long been applying reduced VAT rates to hospitality services.
“Compared to other countries that have lower VAT rates applied across a wider base, the UK’s VAT revenue represents a relatively low percentage of its GPD (currently below 6% of GDP), despite a much higher standard-rate of VAT than many other countries,” he said.
“One of the main reasons is the UK’s widespread VAT reliefs. Although some of these are simple, many are not. The complexity of the UK’s VAT reliefs is a long-standing joke that isn’t funny anymore.
“The hospitality sector continues to demonstrate how bold and innovative it can be in the face of the most testing of circumstances, although it appears that the current government is following the lead of previous governments in lacking either of these qualities when it comes to VAT policy.”
