Change 1 · VAT
VAT drops from 20% to 5% for children’s meals & days out
- 20% Standard Rate – Until 24 June 2026
- 5% Reduced Rate – Summer window only
📅 25 June – 1 September 2026 only · 69 days
A children’s meal of £12 should save £1.50 per plate. Across a summer, families could save £50–£100+.
VAT · What Qualifies: What the 5% rate covers
✓ Children’s meals in restaurants & cafés Must be on a designated children’s menu, consumed on-premises
✓ Cinema, theatre & concert tickets for children Tickets priced & marketed for children. Family admission tickets that include at least 1 child ticket get the 5% applied to the whole package. Standalone group or multi-person tickets that are not held out for sale as family admissions do not qualify
✓ Zoos, theme parks, fairs & soft play Children’s admission at qualifying attractions
✗ Adult meals & tickets — not included Standard 20% rate continues to apply for adults
HMRC note: Businesses that took prepayments at 20% are expected to refund customers for the VAT difference for dates within the window.
Change 2 · Mileage
Approved mileage rates rise for the first time since 2011
| Vehicle Type | Previous | New |
|---|---|---|
| Cars & Vans (First 10,000 miles) | 45p | 55p |
| Cars & Vans (Over 10,000 miles) | 25p | 25p (unchanged) |
15 years frozen · +22% increase · 6 Apr 2026 backdated to
Applies to employees and self-employed workers using their own vehicle for business trips. Backdated to 6 April 2026.
Change 3 · Transport Sector
New targeted tax cuts for hauliers & freight operators
Introduced by the Government to directly support businesses most exposed to soaring fuel costs following the Strait of Hormuz crisis.
01 — 12-Month HGV Road Tax Holiday (1 July 2026 – 30 June 2027) Heavy Goods Vehicles (HGVs) will receive a full 12-month road tax break, saving businesses up to £912 per typical heavy lorry.
02 — Red Diesel Duty Slashed To support the rail freight industry and farmers, fuel duty on red diesel is being cut by over a third. This temporary cut will remain in place until the end of this year.
03 — 5p Fuel Duty Freeze Sustained The 5p fuel duty freeze has been officially confirmed and extended to prevent further pump price shocks.
What This Means for You
Action points for business owners
01 — Update POS & invoicing Apply 5% VAT from 25 June. Remove it from 2 September.
02 — Review advance bookings Customers who prepaid at 20% for dates in the window should receive a VAT refund — HMRC expects this.
03 — Update mileage claims Use 55p from 6 April 2026. Recalculate any claims already submitted this tax year.
04 — Brief your team Payroll, expenses & VAT staff need the correct rates immediately.
05 — Apply transport reliefs Haulage & farming businesses: take immediate advantage of the HGV road tax holiday and lower red diesel rates.
âš Deadline: 25 June 2026. VAT changes kick in within weeks, act before the school holidays begin.
Need Help?
Not sure how these changes affect your business?
Whether you run a restaurant, employ drivers, or are self-employed – getting these wrong costs money. We can help you stay compliant and make the most of what’s changed.