The Summer VAT Cut Has Ended: Make Sure Your VAT Return Reflects It

VAT

3K Financial & Accounting Services Ltd  |  Keeping Klient Knowledgeable

Between 25 June and 1 September 2026, the government’s Great British Summer Savings scheme cut VAT from 20% to 5% on children’s meals in restaurants and on tickets to attractions such as theatres and soft play. Over 2,100 eateries and attractions took part, and the Treasury says families have saved millions of pounds.

The scheme ended at midnight on Tuesday 1 September, and standard-rate VAT of 20% applied to all relevant sales and supplies from 2 September 2026. For participating businesses, the work now is making sure the accounts tell the same story as the tills.

What HMRC told businesses to do

HMRC warned businesses that used the reduced rate to confirm that tills, point-of-sale systems, accounting software and VAT records had been switched back to 20% from 2 September. It also cautioned that VAT returns needed particular care because of the temporary cut.

Where mistakes can creep in

•     Systems that did not switch back. A till or booking system still charging 5% after 1 September under-collects VAT, which becomes a cost to you.

•     Returns that straddle the change. A VAT period covering June to September contains sales at two different rates. Your return must split them correctly.

•     Mixed sales. Only qualifying children’s meals and attraction tickets were eligible for the reduced rate. Adult meals, drinks and other items stayed at their normal rate, so your till setup needs to separate them.

•     Advance sales. Tickets or vouchers sold before the end date but used afterwards can raise questions about which rate applies. Tax point rules matter here, so please check with us or HMRC’s guidance rather than assuming.

•     Weak evidence. Keep records that show which products you treated as qualifying and when your systems were changed.

What to do now

1.      Run a test. Check a sample of sales since 2 September to confirm the correct rate is being charged on every relevant line.

2.      Reconcile your VAT return. Compare sales at 5% and 20% with your till reports before you submit.

3.      Correct any errors. If you find a mistake, tell us quickly. Smaller errors can generally be corrected on your next return, but larger ones may need to be reported to HMRC separately.

4.      Keep your paperwork. Retain records showing which items qualified and when your systems were updated.

Looking ahead

Business owners will also be watching Chancellor John Healey’s first Budget on 28 October. The report on the scheme also highlights other pressures on businesses, including higher employment costs and new obligations under the Employment Rights Act 2025. If you would like to review your VAT position or plan ahead for the Budget, our team is happy to help.

KEY TAKEAWAYS •     The 5% VAT rate applied from 25 June to 1 September 2026. •     Standard 20% VAT applies from 2 September, so check tills and software. •     Reconcile your VAT return carefully if the period spans the change.