Finance21 May, 20262 min read
Rachel Reeves Cuts VAT to 5% for Great British Summer Savings From June 25 to September 1
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VAT cut to 5% for attractions and children's meals this summer. Effective June 25 to September 1, 2026, during school holidays.
VAT Cut for Summer
Chancellor Rachel Reeves announced “Great British Summer Savings,” cutting VAT on eligible summer activities from 20 per cent to 5 per cent beginning on June 25 until September 1, with the temporary reduction also applying to children’s tickets for the cinema, concerts, soft-play centres and the theatre. The Treasury said the tax cut would cost about £300 million and could reduce a typical child’s cinema ticket by £1.50 and the cost of a family day out to a wildlife park by £17.
Prime Minister Keir Starmer said, “When I think about the summer holidays, I think about the Lake District – where I went as a child and later made memories with my own family,” adding that “too many parents feel they have to hold back because the cost of living is still squeezing budgets.” Reeves said the scheme would support families and businesses, insisting, “Whether it is a fun day out, a family meal or taking advantage of the thousands of amazing attractions across the UK, Great British Summer Savings will support families with the little treats in life while boosting business across the UK.”
Who Gets the Help
The reduced VAT rate applies to children aged five to 15, with children’s menus and children’s and family tickets for cinemas, theatres, concerts, shows and exhibitions, as well as admission tickets to attractions including amusement parks, fairs, museums and zoos. The BBC said the discount would be up to businesses to pass on to customers, and Reeves told the BBC she expected the savings made by supermarkets in supply chains to be passed on to customers.
In England, children aged five to 15 are also set to get free bus travel throughout August, as the government said the scheme would include free bus travel for under-16s in England during August. The government statement described the initiative as a way to ease pressure on household budgets while supporting the leisure and hospitality sectors, and the BBC said the VAT cut was part of a wider package aimed at easing cost of living pressures.
Criticism and Funding
Reeves said the VAT cut would be paid for by closing a tax loophole that allows oil companies to avoid paying corporation tax on their UK energy-trading profits, and she also announced a wider £1.8 billion package of measures to help households and businesses with the cost of living. The Institute for Fiscal Studies director Helen Miller said the savings for families are “pretty small,” warning that “£300 million cost of VAT cuts and free bus travel equates to an average saving of around £10 per UK household.”
Paul Nowak, the TUC general secretary, criticized the government’s approach, saying, “With the new energy price cap set to be announced next week, the government will need to be bolder to shield workers and households from Trump’s illegal war.” Reeves also faced a question from Sir Mel Stride, the shadow chancellor, who asked, “Does the chancellor really think this is enough?”