HMRC updates guidance on reduced VAT rate for summer holidays

HMRC has updated its guidance on the temporary reduced rate of VAT applicable to children's meals, family attractions and tickets.

6 Aug 2026

HMRC has updated its guidance on the temporary reduced rate of VAT applicable to children's meals, family attractions and tickets.

Between 25 June and 1 September 2026, the rate of VAT on children's meals and specific attractions is reduced from 20% to 5%.

The new guidance, issued on 27 July, includes additional details on party packages, prepayments and mixed supplies.

The latest guidance also confirms that users of the flat rate scheme should continue to apply their current percentage to calculate their VAT liability, and that the temporary reduced rate doesn't apply to margin scheme supplies under the tour operator's margin scheme.

Ed Saltmarsh, Tax Technical Manager at the Institute of Chartered Accountants in England and Wales (ICAEW), said: 'We highlighted the challenges facing businesses in dealing with the temporary VAT cut, from having to update materials, processes and systems at short notice to dealing with boundary issues, when it was first announced.

'The fact that HMRC has had to update its guidance one month after the policy took effect highlights the complexity of this measure.'