VAT on children’s meals to be cut to 5% this summer

A temporary VAT cut from 20% to 5% will be applied to all children’s menu meals served in restaurants this summer, the government has announced.

The tax cut will run from 25 June to 1 September and apply to all meals served from a children’s menu and marketed, presented and priced as children’s meals.

The government has said it “expects” businesses to pass savings on to families by lowering prices.

Kate Nicholls, chair of UKHospitality, said: “It’s good to see the government recognise the importance of a lower rate of VAT for hospitality as the quickest and simplest way to lower prices and boost consumer confidence.

“A 5% rate of VAT for family admissions to visitor attractions, children’s meals and soft play is a positive step to help families enjoy a great British break this summer.

“If there is scope to further support families by including accommodation in this reduced rate, I would encourage the chancellor to do so to help tackle one of the biggest costs of a family holiday.”

Nicholls believes that the government should view the move as a “downpayment on a wider shift to a lower VAT rate for the entire hospitality sector, to bring us in line with Europe. Our biggest competitors benefit from VAT rates that average around 10%, and can be as low as 7%, and the UK is a clear outlier”.

She added: “As the government has recognised today, VAT is the single biggest lever it can pull to lower prices, tackle inflation, drive demand, boost spending, generate growth and create new jobs. I would urge it to be bold and cut VAT for the entire hospitality sector.”

Emma McClarkin, CEO of the British Beer and Pub Association, said: "We want to keep a trip to the pub affordable, and this move will mean more families can gather together, enjoy a meal out and support their local.

“When you help out business, you can help out the customer, which is why we urgently need VAT to be permanently lowered for all of our sector, all year round.”

Last year, 345 hospitality businesses signed UKHospitality’s open letter to chancellor Rachel Reeves ahead of the Budget urging significant intervention to support the sector, including a VAT cut.

Earlier this year, chef Dean Banks gave diners at all five of his restaurants 20% off their meals for one weekend in a bid to highlight the mounting pressure VAT is placing on a sector which he says is “on its knees”.