Reduced VAT rate over school holidays for Children’s meals

It was announced on Thursday that a summer support scheme is being implemented within the hospitality sector. This will be done through reducing the VAT rate from the standard 20% to 5% on children’s meals at restaurants, cafes, hotels and the other wider hospitality sector. The discounted rate will start from 25^th June and will end on 1^st September.

Ahead of this change, please ensure that your till items are updated/have the function to incorporate this so that you’re ready for the 25^th June. Any reports that are run from this date will need to show the correct VAT rating.

The guidance from HMRC on the reduced rate VAT is:

‘The reduced rate applies to the following categories of supplies where the conditions described are met: children’s meals, children’s cinema, theatre, show and concert tickets, and admission to certain attractions.

‘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.

HMRC have stressed: ‘Where businesses have already accounted for VAT at the standard rate and subsequently choose to apply the lower rate, they should make the necessary adjustments in their VAT accounts. The government would expect that where a customer has prepaid that they would be refunded for any additional VAT paid.’

If you have any questions, please get in touch 😊