22/05/2026
Its a glorious sunny day before a bank holiday weekend. We should be thinking of beer gardens, ice cream in the park, a trip to the seaside. But no, we are thinking about VAT.
Yesterday the Government announced a temporary reduction in VAT for children's meals, tickets and family attractions. From 25 June to 1 September inclusive, the standard rate of 20% is being reduced to 5%. I'm sure all hospitality operators will agree with me that it could/should have gone further and extended to all of hospitality, but this is what they have decided on. A major part of this announcement was reduction in VAT on children’s meals. Unlike the Eat Out to Help Out scheme, where and us had to apply some updates/modifications this one is mostly quite straightforward to implement on your POS systems. If you need any help, get in touch but I will outline here what we need to consider.
For a simple setup, you will want to use an unused tax rate, call it Childs rate, set it to 5% add in and allocate all the Child menu items for the new date. Change the prices to reflect the changes ready to go for 25 June. Simple.
But, do you have eat in and takeaway? If you do, this is a bit more complicated. The reduction is only for eat in, not takeaway. So if you do takeaway kids meals, you will have to cater for that within your setup. If you have separate products in the POS for eatin/takeaway, then its easy to change, if you have eat in/takeaway shifts which adjust VAT status, then you will need it setup to shift price as well. Drinks included as part of the meal are at the discounted rate, but it appears that if they are not having a meal then the same drink is at standard rate. Make sure your POS is setup to account for that correctly. Not too difficult, but give us a call if you're not sure.
To clarify what a child's meal is for the purpose of this reduction, the Government documentation states the following:
"The reduced rate applies to the supply of children’s meals where both of the following conditions are met:
the meal is held out for sale only as a meal for children
the meal is supplied as part of catering services by a restaurant, café or similar establishment for consumption on the premises
Whether a meal is held out for sale only as a meal for a child will depend on how it is marketed, presented and priced rather than who consumes it (for example, being included on a distinct children’s menu).
The reduced rate does not apply for:
meals marketed as smaller portions
lower-calorie options
discounted versions of adult meals
shared meals intended for both adults and children
Where the same meal appears on both an adult and children’s menu, the children’s version would normally be differentiated by portion size and or price. Portion size alone is not a determining factor."
It does appear to me that as long as the menu is clearly aimed at kids, then the discount still applies if an adult consumes it. But you shouldn't try and be clever and create a "special" kids menu that is just a rebrand of your normal adult menu. And strangely enough, they state alcoholic drinks can not be included as part of a childs meal.
Nothing too difficult, but you may need to check your setup or get in touch with us for some help.
Dont forget to update menus and signage. Maybe consider digital signage and which would make price updates on your menus quicker and easier when changes like this are needed. Updating the price in the cloud based back office will update everywhere. Call to find out more.
Obviously I am not an accountant and this is my interpretation of the documents uploaded yesterday. I always recommend people check this with their own professional advisors. If anything changes/gets updated with this, I will update this post.
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