Hospitality businesses across the UK are preparing for a temporary VAT change that could affect how some food and drink businesses price and sell products over the summer months.
The UK Government has announced a temporary reduction in VAT from 20% to 5% on qualifying children's meals, which will run from 25 June to 1 September 2026 as part of its Summer Savings initiative.
The measure is designed to help families with the cost of eating out and encourage more visitors to hospitality venues during the busy summer period.
While the change may be welcome news for customers, local hospitality businesses are now working to ensure their systems, menus and pricing are updated correctly.
Shelley Davies, Finance Director at The Uncommon Practice in Wrexham, says the change is a positive step but one that businesses need to prepare for.
“Many hospitality businesses have faced a challenging few years, with rising costs affecting everything from food and energy to staffing. Any measure that encourages customers through the door is likely to be welcomed by the sector.”
However, Shelley says the VAT change is not as simple as reducing prices overnight.
“Businesses need to understand exactly which meals qualify for the reduced VAT rate and make sure their till systems, accounting software and reporting processes are updated accordingly. Taking the time to get this right now can help avoid issues later.”
Shelley believes the temporary VAT reduction provides an opportunity for businesses to review their operations and make sure they are prepared for both the summer period and the return to the standard VAT rate in September.
“For business owners, it's about striking the right balance between making the most of the opportunity and ensuring they remain compliant. Good planning can help businesses maximise the benefit while avoiding unnecessary complications.”
The temporary reduced VAT rate will end on 1 September 2026, when qualifying items will return to the standard VAT rate unless further measures are announced.
Hospitality businesses looking for more information are encouraged to review the UK Government guidance and seek professional advice if they are unsure how the changes apply to their business.
