The Government has announced a temporary reduction in VAT to help families over the holidays.

From 25 June 2026 to 1 September 2026 (inclusive), the rate of VAT will reduce from standard rate of 20% to reduced rate of 5% on children’s meals.

This temporary change may cause a headache for those that do not have sophisticated till systems.

There could also be the need to educate staff that they need to make a conscious effort and enter children’s meals separately on the till and, of course, menus will need to be changed.

Children’s meals will only be reduced rated where both the:

  • Meal is consumed on the premises; and
  • Is held out for sale as a meal for children.

Interestingly, a child does not have to consume the meal, an adult can purchase a meal off the children’s menu and the reduced rate will still apply.

If a children’s meal includes a non-alcoholic drink, these items do not need to be split out and the whole sale will be reduced rated.

If a children’s main meal menu also states that drinks and desserts can be added on for an extra charge these will also be reduced rated, the key factor being that they must be listed on the children’s menu.

This is different to a meal from the children’s menu and a drink from the normal menu being bought at the same time which would need to be split between reduced and standard rated.

If an establishment offers a smaller portion option, this alone will not qualify as a children’s meal but if they were to be held out for sale under a separate children’s menu these meals would then qualify.

Marketing and presentation are key to take advantage of the reduction. If you have any queries, speak to our team.