If you run a restaurant, café, or food-led pub and you have a children’s menu, there’s something worth knowing about this summer.
The government has confirmed a temporary reduction in VAT on children’s eat-in meals from the standard 20% down to 5%, running from the 25th of June to the 1st of September 2026.
It’s part of a broader scheme called the Great British Summer Savings initiative. You can find all the details in the snappily titled Revenue and Customs Brief 5 (2026).
The scheme also covers family admission tickets to attractions like zoos, theme parks, soft play centres, and cinemas. If you’re a parent or looking after kids this summer, the gov.uk fact sheet can fill you in.
For now, let’s focus on hospitality.
What actually qualifies and what doesn’t
The headline is simple. The detail (as always with VAT!) is where you need to slow down.
For a children’s meal to qualify for the 5% rate, it needs to meet two conditions:
- The meal must be marketed, priced and presented as a children’s meal on your menu, on your signage and at the till.
- It must be eaten on the premises.
That’s it. Two conditions. But each one has a few things tucked inside it.
Marketed, priced and presented means the meal has to exist as a distinct children’s offering with its own pricing.
Not just a smaller portion of an adult dish, not a discounted version of something on the main menu, and not a meal that’s shared between an adult and a child. The test HMRC will apply is how the meal is held out for sale, not who actually eats it.
Eat-in only means takeaways don’t qualify, regardless of who they’re for.
What about meals with a drink or a dessert included? A package deal can qualify for the reduced rate as long as the whole thing is presented as a children’s meal offer. So a “kids’ meal deal” that bundles a main, drink, and pudding together is fine if it’s clearly named and priced as such.
Three things to check before the 25th of June
You’ve got just over three weeks, and the time will fly, trust me. Here’s what to focus on.
1. Does your children’s menu exist clearly and separately?
A children’s menu needs to stand alone for this. It needs its own name, its own prices, and clearly presented as for children.
If you’ve got a few kids’ dishes lurking at the bottom of the main menu without their own section or pricing structure, that’s worth sorting before the rate changes.
2. How are those meals presented throughout your venue?
This isn’t just about the printed menu. Check your signage, your ordering system, and how meals are described verbally. Eligibility is based on how the meal is held out, so consistency matters.
A “kids’ pasta” on the specials board needs to be seen as a children’s meal all the way through the journey the customer takes, not just on the receipt.
3. Have you spoken to your EPOS provider?
This is the one people leave too late. You need to be able to apply the 5% rate specifically to qualifying children’s meals at the point of sale, not across all children’s items, not across meals generally, but to qualifying eat-in children’s meals only.
If your till system can’t distinguish these sales, you’ll have a VAT return problem by September. Best to talk to your provider now if you need help.
The pricing decision
Once the legislation comes into force, you have a genuine choice to make.
You can pass the saving on to customers, reducing the price of qualifying children’s meals by the equivalent of the VAT difference. The government is hoping businesses will do this, as it’s designed to help families during the summer holidays.
For many hospitality businesses, it could be a useful marketing angle for family trade over a traditionally competitive period.
Alternatively, you can retain the saving (or part of it) and let it contribute to your margins. Although the government expects you to pass on the savings, there doesn’t appear to be a legal obligation to do so.
For businesses operating on very thin margins (and plenty are), that’s a meaningful consideration.
The right answer depends on your specific situation, which is why it’s worth discussing with your accountant before you decide.
What works for a café with strong family trade might be different from what makes sense for a food-led pub with a smaller children’s menu.
A quick note on the wider picture
Trade bodies have broadly welcomed this particular announcement while being clear they see it as a starting point, not a solution. The scheme is targeted and temporary, and standard rates return from September.
The hospitality sector has been lobbying for broader long-term VAT assistance for a long time. Indeed, a new campaign has just been launched called VATs The Problem, which is calling for a 10% VAT for hospitality businesses. At the time of writing, the petition has almost 200,00 signatures.
I’ll be talking more about what’s happening in hospitality and why VAT has become such a live issue. That’s coming up in the next post.
For now, if you’re covered by this change for children’s meals, the main thing is to be ready for the 25th of June.
Need help working out how this applies to your business?
VAT is one of those areas where the rules are deceptively simple to read and surprisingly easy to put into practice wrongly.
If you’re not sure how this change affects your VAT return, your pricing, or your system setup, give us a shout.
Honestly, we’d much rather have a quick conversation now than unpick an error later!
Be you. Be brave. Build a better business.
Gillian x