Increase profits this summer with the new VAT cuts

For many businesses, the summer holidays are peak season. With kids off school and families on holiday, it’s often a chance to generate the extra revenue that sees them through the quieter winter months. 

To help families enjoy more days out this summer, Labour recently announced a temporary VAT cut on children’s days out. Here, we share some ideas to help small businesses make the most of this opportunity and maximise profits this summer.

What is the Great British Summer savings scheme?

This summer, VAT on children’s meals, tickets and family attractions will be temporarily reduced. It is hoped this will ease cost of living pressures on families, and increase footfall for small businesses.  

Between 25 June and 1 September 2026, VAT will be temporarily cut from 20 per cent to 5 per cent on eligible activities in England, Wales, Scotland and Northern Ireland. The Government expects businesses to pass on this saving to families. 

The reduced rate will apply to:

• Children’s menu meals served in restaurants for consumption on the premises

• Children’s and family tickets for cinemas, theatres, concerts, shows and exhibitions

• Admission tickets, for both children and adults, to a range of attractions, including amusement parks, fairs, museums, zoos, soft play centres, circuses, adventure parks, nature reserves, wildlife parks and observation attractions

How small businesses can maximise the summer VAT cuts

If your business will qualify for the reduced rate of VAT, now is the time to prepare. If you don’t currently qualify, think about ways you could incorporate new products or services or adapt your existing offering. 

Rethink your offering

If you are a hospitality business that doesn’t currently have a children’s menu, now could be a good time to introduce one. By passing on the VAT cut on children’s meals, you might attract new customers, as well as encouraging existing customers to bring their families. 

There are specific rules for what products qualify for the reduced rate. If you don’t currently meet them, consider changing how you price and market kids’ meals and family tickets so you can provide a cheaper rate.

You can read the full guidance from HMRC about what qualifies for the reduced VAT rate here. 

Market your offer

Once you’ve determined how you can bring savings to families, ensure you are marketing your deal effectively. Signpost the new reduced price at your venue, on social media, and through local news outlets.  

Be sure to register your business on the official Great British Summer Savings website, which will act as a directory for families looking for offers. Registering will boost visibility and help your business benefit from the Government’s wider marketing campaign. 

Provide the best possible experience 

If you’re attracting new customers this summer, you’ll want to make sure they have a great experience. As you know, happy customers are more likely to return, as well as share their recommendations with friends and family.

Consider whether you currently have capacity to handle the increased footfall. It may be that you need to invest in new equipment, facilities or staff to serve customers quicker and ensure they enjoy their visit.

Convert new customers into long-term fans

A summer of happy customers is an opportunity to convert them into returning customers and advocates of your business. As well as providing great service, consider a discounted return ticket, a loyalty card, or incentives for leaving a review. 

If you think finance might help you make improvements so you can make the most of the summer VAT cuts, apply online in minutes and we’ll help you find the product that’s right for you and your business.

29/06/26: This information is correct at the time of writing and is subject to change from September 1st 2026. While we want to help as much as we can, the information found here is provided solely for informational purposes and should not be considered financial, legal advice or tax. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice.