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VAT cut announced for summer family activities
Families across the UK will pay less for theme parks, zoos, cinemas and children's meals this summer after Chancellor Rachel Reeves reduced VAT from 20% to 5% for six weeks.
When and where the discount applies
The temporary VAT cut starts when Scottish schools break up at the end of June and runs until classrooms reopen in England, Wales and Northern Ireland on 1 September. Businesses will decide whether to pass the saving on to customers.
The lower rate covers children's tickets to cinemas, soft play centres, theatres and museums, as well as meals in restaurants and cafes.
Broader summer savings package unveiled
The VAT reduction is part of a wider £1.8 billion "Great British Summer Savings" campaign aimed at easing cost-of-living pressures. Other measures include:
- Free bus travel for under-16s in England during August;
- Suspension of import tariffs on more than 100 basic foods, including biscuits, chocolate, dried fruit and nuts;
- Extension of the 5p fuel-duty cut until the end of the year;
- A 12-month road-tax holiday for HGVs, a tax cut on red diesel for farmers and rail freight, and a 10p rise in tax-free mileage rates for work-related driving.
The Treasury said the full list of tariff-free food products will be published next week, but cautioned that cheaper imports may not translate into lower supermarket prices.
Chancellor defends measures amid criticism
Speaking after the announcement, Reeves said: "What matters for families is not just getting by, but being able to enjoy time together without worrying about the next bill. This is also about supporting the hospitality sector."
"The people coming to us every 30 seconds in crisis aren't just worrying about August, they're already struggling now and fear things will only get worse as winter hits."
Dame Clare Moriarty, Chief Executive, Citizens Advice
The Institute for Fiscal Studies estimated the package would save the average UK household around £10.
Industry and opposition react
UK Hospitality called the VAT cut a "positive step" and urged the government to consider a permanent lower rate for the sector. Odeon said it was "excited that our guests will be able to enjoy the big screen for less" over the summer.
Opposition parties were divided. The Conservatives' shadow chancellor, Mel Stride, said Reeves should focus on cutting public spending and taxes. Liberal Democrat transport spokesperson Olly Glover welcomed free bus travel but demanded an emergency transport package that includes a £1 bus-fare cap and 10% rail-fare cuts. Reform UK's Robert Jenrick called the measures "small change" and pressed for radical tax cuts on energy bills.
Supermarkets resist pressure to cap prices
Ministers have asked supermarkets to cut prices voluntarily on staples such as eggs, bread and milk, but ruled out mandatory caps. Marks & Spencer's chief executive, Stuart Machin, dismissed the idea as "completely preposterous".
Economic backdrop and future risks
Thursday's purchasing managers' index showed UK business activity fell for the first time in a year, reflecting weaker consumer and corporate confidence. Households are also bracing for higher energy and food bills as the war in Iran disrupts supply chains.
