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Temporary reduced rate of VAT for children's meals, tickets and family attractions (part 10)

Updated 27 July 2026

Read the general approach to VAT compliance controls (part 2) of Help with VAT compliance controls — GfC8, if you have not already.

Background

From 25 June 2026 up to and including 1 September 2026 the temporary reduced rate of VAT applies to:

• certain supplies of children’s meals
• children’s admission to theatres, cinemas, concerts, exhibitions and shows
• all admission tickets to attractions suitable for families with children

Read about the changes in Revenue and Customs Brief 5 (2026): Temporary reduced rate of VAT for children’s meals, tickets and family attractions.

The intention of the temporary reduced rate is to support children and families by reducing the cost of certain items. Businesses are expected to pass on the benefit of the VAT reduction to consumers. These guidelines are intended to help businesses implement the temporary reduced rate accurately so that the intended benefit can be delivered while maintaining accurate VAT accounting and reporting.

These guidelines highlight examples of risks that may arise when accounting for supplies eligible for the temporary reduced rate of VAT. They also provide examples of controls that may help businesses reduce the risk of error and support accurate VAT reporting.

The examples are not exhaustive. Businesses should make sure that the design of their systems, processes and controls is appropriate to the scale and complexity of their activities.

Businesses should also consider their approach to governance, record keeping and evidence throughout the temporary reduced rate period. This may include:

• maintaining audit trails
• assigning ownership of processes and controls
• managing manual interventions and adjustments
• retaining evidence supporting VAT decisions

Maintaining appropriate records may help businesses demonstrate how the temporary reduced rate has been applied and support the accuracy of VAT returns submitted during the reduced rate period.

The example risk and control areas covered in these guidelines are:

• system limitations when applying the reduced rate
• identifying qualifying items
• promotions, offers and discounts
• eat in and takeaway meals
• errors when recording transactions
• advance bookings and payments
• making VAT adjustments
• VAT compliance after 1 September 2026

Systems limitations when applying the reduced rate

Till, booking and point-of-sale systems may have limited capability or flexibility to apply the temporary reduced rate. This may be particularly relevant as these system changes need to be made for a limited time.

There is an increased risk that VAT may be calculated or reported incorrectly where systems cannot:

• apply the reduced rate automatically
• produce the information required to support VAT reporting

Businesses should consider how any system limitations will be managed and whether additional controls are needed to reduce the risk of error.

Control points

1. Documented procedures for transactions requiring manual workarounds.
2. Training and guidance for staff involved in processing affected transactions.
3. Automated assignment of VAT rates where system functionality allows.
4. Documented approval and audit trails for changes to systems configuration such as VAT rates, tax codes, product files and transaction overrides.
5. Restricted access to amend tax codes.
6. Product records clearly identifying whether supplies are for a child or adult.
7. Documented evidence supporting any manual interventions.

Example of good practice — systems limitations

The business maintains an audit trail for changes to VAT rates and tax codes, including details of who made the change and when it was made.

Changes require approval before use and reports are available to identify transactions where the temporary reduced rate has been applied.

Identifying qualifying items

Qualifying items should be identified accurately within tills, point-of-sale systems and other business systems to support the correct VAT treatment being applied. Guidance and training should be clear and easy to understand.

Without appropriate guidance, there is a risk that the conditions for applying the temporary reduced rate could be inconsistently understood across the business. Where systems cannot clearly distinguish between qualifying and non-qualifying items, such as children’s and adult products, the ineligible items could have the reduced rate applied incorrectly. Transactions involving multiple supplies with different VAT liabilities may also increase the risk of error.

For more information on qualifying items read Revenue and Customs Brief 5 (2026): Temporary reduced rate of VAT for children’s meals, tickets and family attractions.

Control points

1. Guidance is maintained explaining how qualifying items are identified and recorded within business systems, with evidence retained to support eligibility decisions.
2. Periodic reviews are undertaken to check that qualifying items have been identified correctly.
3. Qualifying items are clearly identified on marketing materials and in systems.
4. A centrally maintained list of qualifying items is documented and reviewed when products, services or pricing structures change.
5. Product codes are linked to the appropriate VAT treatment within business systems.
6. System changes that could affect VAT treatment are subject to review and approval.
7. Transaction testing is performed to confirm the reduced rate is being applied consistently.
8. Time of supply rules are considered when determining whether supplies qualify for the reduced rating.
9. Evidence is retained to support the VAT treatment applied to qualifying items and packages.

Example of good practice — identifying qualifying items

A restaurant maintains a separate children’s menu, with qualifying items clearly identified within the point-of-sale system.

Product codes are linked to the appropriate VAT treatment, and changes to menus or product coding are reviewed, approved and documented before implementation.

Promotions, offers and discounts

Promotions, offers and discounts can increase the complexity of applying the temporary reduced rate. Where promotional transactions include a mixture of qualifying and non-qualifying supplies, there is a risk that the reduced rate may be applied incorrectly. Businesses should consider the impact of existing promotions and discounts when making system and process changes related to the temporary reduced rate.

Control points

1. Promotional products and offers are configured within point-of-sale systems to support the correct VAT treatment.
2. Reports are available to identify transactions where promotions or discounts have been applied and the VAT treatment used.
3. A centrally maintained record of promotions is retained, including how the VAT treatment has been determined and applied.
4. Periodic transaction testing is undertaken to confirm promotions are operating as intended.
5. Any manual adjustments are documented, reviewed and reconciled to VAT returns where appropriate.

Example of good practice — promotions, offers and discounts

A business maintains a central record of promotional activities affected by the temporary reduced rate.

Changes to promotional activities are documented and subject to approval before use.

Reports are reviewed regularly to confirm that the correct VAT treatment is being applied to promotional transactions.

Eat in and takeaway meals

The temporary reduced rate applies differently depending on whether the food or drink is consumed on the premises or taken away. Where this distinction is not identified accurately, there is a risk that the reduced rate could be applied incorrectly or that businesses may not be able to demonstrate why a particular VAT treatment was used.

Businesses should make sure that their systems, records and supporting evidence can demonstrate how the VAT treatment of food and drink consumed on the premises, or taken away, has been determined. Where this information cannot be captured directly within business systems, businesses should consider whether alternative evidence or controls can support the VAT treatment applied.

Control points

1. Point-of-sale systems include separate options for children’s food and drink consumed on the premises and taken away where this affects the VAT treatment.
2. Systems are configured, where possible, to determine the VAT treatment automatically using tools such as product codes, system flags or transaction types.
3. Food bundles, meal deals or similar products are maintained and reviewed centrally where they could affect VAT treatment.
4. Periodic reviews are undertaken to confirm that the reduced rate is only being applied to qualifying items.
5. Exception reporting is used to check locations for collection or takeaway only transactions where the reduced rate may have been applied incorrectly.
6. Where systems cannot separately record food and drink consumed on the premises and taken away, alternative evidence is retained to support the VAT treatment applied.
7. VAT reporting can be reconciled to underlying source data and any supporting evidence used to support reduced rating.

Example of good practice — eat in and takeaway meals

A self-service machine asks customers to select whether food or drink will be consumed on the premises or taken away before completing their order.

This information determines the VAT treatment applied by the point-of-sale system and flows through to the VAT return workings and submission.

The business reviews exception reports and undertakes periodic testing to identify transactions where the reduced rate may have been applied incorrectly.

Errors when recording transactions

Even where qualifying items have been identified correctly, errors can arise when transactions are recorded within business systems.

Both staff and customers may make incorrect selections, particularly where:

• products are similar
• transaction options are unclear
• new products have been introduced
• transactions require manual intervention

Errors may also occur where transactions are manually overridden. Businesses should consider whether their systems, processes and controls reduce the risk of incorrect selections and make sure that manual changes are controlled and reviewed.

Control points

1. Point-of-sale systems provide clear transaction options and descriptions to support accurate selection.
2. Products that are not in use during the reduced rate period are disabled where appropriate.
3. Staff receive guidance and training on how to process transactions affected by the temporary reduced rate.
4. Self-service machines have clear options where VAT treatment differs.
5. Attention message to confirm inputs are correct.
6. Access to manual overrides is limited.
7. Audit trails are retained for changes and amendments made to point-of-sale and self-service machines.
8. Exception reporting is used to identify amended transactions or unusual applications of the reduced rate.
9. User access permissions are reviewed and aligned to individual responsibilities.

Example of good practice — errors when recording transactions

A member of staff selects the wrong ticket type and attempts to apply a manual discount.

The point-of-sale system restricts this action and requires supervisor approval before the transaction can be amended.

Exception reporting identifies the transaction during the VAT return preparation process and the adjustment is reviewed and evidenced before submission.

Advance bookings and payments

The temporary reduced rate must be applied in accordance with the normal VAT time of supply rules and any admissions restrictions set out in the relevant guidance. Businesses may experience additional complexity where bookings are taken or payments are received, either:

• before the temporary reduced rate comes into effect
• where bookings and payments are received during the relief period for admissions taking place after the relief ends

Read more information on time of supply rules in VAT guide (VAT Notice 700).

Control points

1. Booking, reservation and ticketing systems are reviewed to identify transactions that may be affected by the temporary reduced rate.
2. Reports are available to identify bookings and payments that span the introduction or withdrawal of the temporary reduced rate.
3. Documented procedures explain how time of supply and change of rate rules are applied to advance payments and bookings.
4. Periodic reviews are undertaken to confirm that VAT has been accounted for correctly on affected transactions.
5. Supporting calculations and evidence are retained where adjustments are made to transactions that were previously accounted for at a different VAT rate.
6. Adjustments relating to advance payments are reviewed, approved and reconciled to the VAT return where appropriate.

Example of good practice — advance bookings and payments

A business configures its booking, reservation and payment systems to identify advance bookings and payments that fall around the introduction and withdrawal of the temporary reduced rate.

The system reports are reviewed regularly to confirm that transactions spanning the start or end of the temporary reduced rate have been treated appropriately, in line with the applicable VAT time of supply and change of rate rules.

Where adjustments are required, the calculations, approvals and resulting VAT return entries are documented and retained.

Making VAT adjustments

Adjustments to VAT returns may be required:

• to correct errors
• when other methods of applying the temporary reduced rate are not possible

Manual adjustments may be necessary in some circumstances. However, reliance on manual processes can increase the risk of error and should not be the default approach.

Businesses should make sure that adjustments are supported by:

• documented calculations and comments
• appropriate review and approval processes
• reconciliations to VAT return submissions

Examples of processes with a higher risk of error include:

• flat discounts applied with later VAT adjustments to reflect the reduced rate
• businesses making manual adjustments rather than coding products appropriately during the reduced rate period
• overreliance on manual VAT adjustments to correct processing errors

Control points

1. Training provided to relevant staff on how to complete required adjustments.
2. Documented process notes for how to complete an adjustment.
3. Review and approval of adjustments by senior members of staff.
4. Clear recording of the adjustments and their effect on the VAT return explaining why the adjustment was needed.
5. Make sure VAT return reconciliation for relevant period includes reduced rated adjustments.
6. Evidence and audit trail retained for all adjustments made.

Example of good practice — making VAT adjustments

The business maintains a separate record of VAT adjustments, including the:

• reason for each adjustment
• amounts involved
• tax codes affected
• date the adjustment was made

Adjustments are supported by documented calculations and are subject to review and approval before being included in the VAT return.

VAT compliance after 1 September 2026

From 2 September 2026, the temporary reduced rate will no longer apply. Businesses should make sure that systems, processes and controls are updated to reflect the correct VAT treatment from this date. Failure to remove temporary system changes may increase the risk of VAT being underdeclared.

Control points

1. Responsibility for implementing and monitoring the temporary reduced rate is clearly assigned.
2. An implementation plan is maintained covering system changes, staff guidance, reporting and review activities.
3. Systems are configured to apply the correct VAT treatment after 1 September 2026.
4. Products, discounts and tax codes associated with the temporary reduced rate are disabled or amended where appropriate.
5. Evidence is retained to demonstrate how the reduced rate was applied and subsequently withdrawn.
6. Reviews and testing are undertaken to confirm that temporary changes have been removed and the correct VAT treatment reinstated.

Example of good practice — VAT compliance after 1 September

A business maintains an implementation plan covering system changes, staff guidance and control activities throughout the reduced rate period.

Responsibility for key processes is clearly assigned.

Following the end of the temporary reduced rate period, reviews and testing are done at relevant stages to confirm that the standard rate of VAT has been reinstated.