VAT Cuts set to Drive Footfall for Hospitality, Leisure and Retail Businesses

Families across the UK are set to benefit from lower costs on everyday treats and days out this summer, following the government’s announcement of a temporary VAT reduction under the Great British Summer Savings scheme.

From 25 June to 1 September 2026, VAT on a range of family-focused activities reduced from 20% to 5%, aimed at easing cost-of-living pressures while increasing footfall across hospitality, leisure, and retail businesses.

What’s included?

The temporary VAT cut applies to:

• Children’s meals in restaurants (on-premises dining)
• Children’s and family tickets for cinemas, theatres, concerts, and exhibitions
• Entry tickets for both children and adults to attractions such as:
  • Theme parks and amusement parks
  • Soft play centres and adventure parks
  • Museums, zoos, wildlife parks, and similar attractions

The government expects businesses to pass on the VAT savings to customers, helping reduce prices during the peak summer period

Additional measures supporting demand

Alongside the VAT reduction the government will introduce free bus travel for children aged 5-15 in England throughout August, improving accessibility to leisure destinations and supporting increased visitor numbers.

Together, these measures are intended to drive higher footfall across the summer season, particularly for businesses reliant on discretionary spend.

What this means for businesses

For operators across hospitality, leisure, and retail attractions, the scheme presents both operational considerations:

• Increased footfall during peak summer trading months
• Higher overall transaction volumes from family-focused visits
• Opportunities to promote value-led offers and experiences

However, businesses will also need to ensure their systems and processes are fully prepared to apply the reduced VAT rate correctly.

Action points for businesses

To prepare for the introduction of the temporary VAT reduction, businesses should take early action to ensure systems, pricing and reporting are ready ahead of implementation.

Key steps include:

• Reviewing till and payment systems to ensure reduced-rate VAT items can be correctly identified and applied
• Identifying all eligible supplies to confirm which products and services fall within the reduced VAT scope
• Updating pricing, menus and ticketing systems to reflect the temporary VAT reduction where required
• Ensuring start and end dates are embedded in systems and processes so the reduced rate is only applied within the scheme window (25 June to 1 September 2026)
• Training staff so they understand which items are affected and can communicate changes clearly to customers
• Reviewing VAT reporting and accounting processes to ensure correct treatment and compliance with HMRC guidance

Early preparation will help reduce the risk of errors during a busy trading period and allow businesses to fully benefit from the expected increase in demand.

How we can help

At M+A Partners, we can support businesses in preparing for these changes and ensuring full compliance with the new VAT treatment.

We can assist with reviewing your pricing structures, identifying which supplies fall within the reduced VAT scope, and advising you on ensuring your systems and processes are correctly configured ahead of implementation.

We can also help assess the wider commercial impact of the scheme, including margin implications, cash flow considerations and pricing strategy, so you are well positioned to take advantage of increased summer demand.