VAT Cut to 5% for a "Great British Summer"

Today the Chancellor Rachel Reeves announced a temporary reduction in VAT from 20% to 5%.

This will run between the end of June (when children in Scotland break up for the summer holiday)until children return to classrooms in England, Wales and Northern Ireland on 1 September.

The reduced rate to 5% this summer will apply to:

• 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 for attractions including amusement parks, fairs, museums, zoos, soft play centres, circuses, adventure parks, nature reserves, wildlife parks and observation attractions

How it will work in practice is being fleshed out in more guidance, but the government expects businesses to pass on VAT savings to customers- not retain for themselves to off set other rising costs, The benefit for operators being increased footfall by families generally as a result.

Guidance for businesses in scope of the policy has been published by HMRC which outlines how businesses can operate the scheme.

See link to Guidance and announcement https://www.gov.uk/government/news/great-british-summer-savings-vat-slashed-to-save-families-money-on-days-out

Operators have so far made a range of comments-

Fiona Eastwood, Chief Executive Officer of Merlin Entertainments said:

This is great news for the UK’s visitor economy and for families planning trips this summer. As the season gets underway, this timely move from the Government will make it easier for people to get out, explore and create memorable moments together at destinations across the country.

Merlin will be applying this VAT cut to both admission tickets and children’s meals, adding more value to days out and short breaks at our 20 UK attractions. We’re excited to welcome more families to our resort theme parks and immersive experiences for a summer packed with fun, play and lasting memories.

Kate Nicholls of UKH suggested the move should be "viewed by Government as a down-payment on a wider shift to a lower VAT rate for the entire hospitality sector, to bring us in line with Europe".

A request long made by many operators.