Are Your Tills Ready? HMRC's New 5% VAT Rate for Children's Meals Starts 25 June 2026

From 25 June 2026, HMRC applies a new 5% VAT rate to qualifying children's meals served on-premises and to all admission tickets at UK family attractions. The change is set out in HMRC Revenue and Customs Brief 5-2026 and enacted by SI 2026/576. Seven days from today, the new rate is live — and the window to update your point-of-sale systems is closing fast.

This is not just an accounting entry. It is a POS reprogramming job. Get it wrong and you face liability in both directions: charge too much VAT and you owe customers a refund; charge too little and HMRC treats it as a VAT debt with interest. There is no grace period.

This guide covers exactly what qualifies, what does not, and the four steps every hospitality and leisure operator needs to take before 25 June.

What Is Changing on 25 June 2026?

Under current rules, the standard 20% VAT rate applies to most food and drink consumed on-premises in UK hospitality settings. From 25 June, a new 5% reduced rate applies to two categories:

1. Qualifying children's meals sold on a distinct children's menu and consumed on-premises
2. All admission tickets at family attractions — including zoos, theme parks, soft play centres, adventure parks, water parks, cinemas, theatres, and exhibitions

The policy objective is to reduce the cost of family dining and leisure. The operational reality is that every qualifying business must update its systems before 25 June. HMRC's Revenue and Customs Brief 5-2026 sets out the qualifying conditions. SI 2026/576 is the enabling legislation.

There is no transitional period. On 25 June, the new rate applies. If your tills still show 20% VAT on a qualifying children's meal on the morning of 26 June, you are already non-compliant.

What Qualifies for the New 5% Rate?

Children's Meals in Restaurants, Cafés, Pubs and Hotels

The 5% rate applies when all three conditions are met:

• The food items appear on a distinct, separate children's menu — not a section of the adult menu, not a boxed-off "kids' options" panel, but a genuinely standalone children's menu
• The meal is consumed on-premises. The same meal ordered as takeaway remains at the standard 20% rate.
• The items are clearly identifiable as children's meals in your menu documentation and POS records

Non-alcoholic drinks bundled within a qualifying children's meal at a single package price also qualify for the 5% rate. A children's meal deal priced as one item — main, drink, and dessert — applies the 5% rate across the bundle, provided no alcohol is included.

Family Attraction Admissions

This is the part many operators are missing. The 5% rate applies to all admission tickets at qualifying family venues — not just children's tickets:

• Zoos and wildlife parks
• Theme parks and amusement parks
• Soft play centres
• Adventure parks and activity centres
• Water parks
• Cinemas (standard screenings)
• Theatres and exhibitions

If an adult and child visit a theme park together, both adult and child admission tickets qualify at 5%. Family ticket bundles qualify in full, provided they do not include alcohol or other non-qualifying extras priced separately.

What Does NOT Qualify — Common Mistakes to Avoid

This is where most hospitality businesses will come unstuck. HMRC has drawn the qualifying conditions tightly. The following do not attract the 5% rate:

• Smaller adult portions — a half-portion steak from the adult menu, even if served to a child and priced lower, is not a children's meal. It must be on a standalone children's menu.
• Discounted adult meals — marketing an adult menu item as a "children's special" or reducing the price for under-12s does not create a qualifying children's meal.
• Calorie-reduced versions of adult dishes — a lighter or smaller version of an adult dish does not qualify unless it is a genuine, named item on a distinct children's menu.
• Takeaway children's meals — the 5% rate is on-premises only. A takeaway children's meal remains at 20% VAT. If your POS applies the same product code to eat-in and takeaway, you need separate codes.
• Optional extras priced separately — a dessert or side ordered as an additional item alongside a qualifying meal is not automatically at 5%. Only items bundled into the qualifying meal deal are covered.
• Any meal or bundle including alcohol — as soon as alcohol enters a bundle, the entire bundle reverts to 20% VAT. No exceptions.

For family attractions, HMRC guidance indicates the venue must have families as its primary target market. A concert venue or adult theatre that occasionally hosts family shows is unlikely to qualify for all admissions. If there is genuine doubt about whether your venue qualifies, seek advice from a VAT-registered accountant before 25 June.

The POS Problem: Why This Is an Operational Emergency

Most hospitality operators understand this is a VAT change. Fewer have grasped that it is a POS reprogramming job — and that job needs to be done this week.

Your current till system applies 20% VAT to on-premises food items. From 25 June, every qualifying children's menu item must be tagged at 5% in your POS. That means:

• Identifying every qualifying item and creating or amending its product code
• Re-testing the amended POS configuration before go-live
• Verifying that your eat-in and takeaway flags are correctly separated (5% eat-in vs 20% takeaway for the same product)
• Updating any online ordering or delivery integrations that pull from your till system
• For family attractions: updating ticketing systems for both walk-in and advance bookings

Common UK hospitality POS platforms — Square, Lightspeed, Clover, Tevalis, EPOS Now, and Oracle Micros — all support multiple VAT rates. Most can be updated in-house through the admin panel. But if your system is IT-managed or requires a technician visit, book that visit today. POS providers will be under high demand this week from hospitality clients all making the same change.

The Two-Direction Liability Risk

Getting the rate wrong creates liability in both directions, and neither is comfortable:

• Overcharging (applying 20% on a qualifying item): You have collected VAT that was not legally due. Customers are entitled to a refund for the overcharge. HMRC requires you to account for the difference in your VAT return.
• Undercharging (applying 0% or no VAT to a non-qualifying item): You have undercollected VAT. HMRC treats this as a VAT debt, plus interest and potential penalties from the date the error began.

The clean resolution is to get the rate right on 25 June. A documented action plan — reviewed, updated, and dated before the deadline — is also your evidence that you acted in good faith if HMRC queries your records later.

Your 4-Step Action Plan — Complete This Before 25 June

Step 1: Audit Your Children's Menu

Pull your current children's menu. Write a list of every item that appears on a standalone children's menu and is served on-premises. These are your qualifying items. If your current "children's menu" is actually a section of the adult menu, now is the time to create a properly distinct document — both for compliance and for your POS configuration.

Step 2: Update Your POS/Till Configuration

Log into your POS admin system and amend the VAT rate on each qualifying children's menu item from 20% to 5%. Create separate product codes for eat-in and takeaway versions if your system doesn't already distinguish them. If you use an EPOS provider, call them today — not next Wednesday. Test the change on a closed till before 25 June opens.

For family attractions: update your ticketing platform (online and door) to apply 5% VAT to all admission categories from 25 June.

Step 3: Brief Your Team

Your front-of-house staff need two facts before Saturday 25 June: (a) the children's menu items now attract 5% VAT eat-in only, and (b) takeaway versions of the same meals remain at 20%. A short pre-service briefing is all that is required. If customers ask why their receipt looks different, your team should be able to explain confidently.

Step 4: Document Everything

HMRC can inspect your VAT records at any time and will want to see evidence that you applied the change correctly from 25 June — not retroactively corrected after an inspection. Keep a dated record of:

• The children's menu items you identified as qualifying
• When you updated your POS and which items were changed
• When you briefed your team
• Any advice you took from an accountant or VAT consultant

ComplianceAlert's Action Centre has the 5% VAT Hospitality Compliance Checklist pre-built. Activate it, tick off each step, and your evidence is saved automatically to the Evidence Vault — timestamped, audit-ready, and exportable in one click if HMRC ever asks. That is the difference between demonstrating compliance and hoping you remember what you did in June.

"It's not enough to know the rules. You need to prove you acted on them."

If You Are Uncertain Whether Your Venue Qualifies

This is a new area of VAT law. If you are unsure whether your venue counts as a "family attraction" for the purposes of all-admissions qualification, or if your menu structure genuinely creates a distinct children's menu, take professional advice before 25 June. Getting the categorisation wrong from day one and running it incorrectly for months creates a larger VAT correction exercise than clarifying before you start.

Need VAT guidance? Find a verified accountant at compliancemarket.co.uk/accountants — the UK's professional compliance marketplace, with 3,400+ verified specialists.

Frequently Asked Questions

My café has a "kids' section" on the standard menu. Does that qualify?

No. HMRC requires a distinct, separate children's menu — a standalone document or clearly delineated separate menu, not a section within the adult menu. Review your menu format before 25 June and consider creating a genuinely separate children's menu if you want to apply the 5% rate.

We serve the same children's meal eat-in and as takeaway. Do we need two prices?

You can keep the same customer-facing price, but the VAT component will differ: 5% on eat-in, 20% on takeaway. Your POS needs separate product codes for each. Most modern EPOS systems handle this automatically with an eat-in/takeaway toggle.

What counts as a family attraction for the admissions qualification?

HMRC guidance covers zoos, theme parks, soft play centres, water parks, adventure parks, cinemas, theatres, and exhibitions where families are the primary target market. If your venue serves a mixed adult and family market, consult your accountant. Do not assume the qualification applies without checking.

We missed the 25 June deadline. What now?

Correct your POS as quickly as possible and apply the 5% rate from the date of correction. Prepare to calculate and correct any liability from 25 June. Voluntary disclosure to HMRC is treated more favourably than non-compliance discovered during an audit. Document the correction and when it was made.

Does this affect my VAT return?

Yes. Qualifying sales from 25 June will be recorded at 5% in Box 1 (VAT due on sales) on your VAT return. Your accounting software should be updated to reflect the new rate alongside your POS changes. If you use a bookkeeper or accountant, notify them now so their software is correctly configured.

TL;DR — Key Takeaways

• HMRC's new 5% VAT rate for qualifying children's meals and family attraction admissions starts 25 June 2026 (SI 2026/576, RC Brief 5-2026)
• Qualifying children's meals: distinct children's menu, eat-in only. Takeaway and smaller adult portions do not qualify.
• Family attractions: ALL admission tickets qualify — adults and children. Not just children's tickets.
• Alcohol in any bundle = loses the 5% rate entirely
• The critical action: reprogram your POS/tills before 25 June. Book your EPOS provider now if you need support.
• Keep a dated record of changes made — your HMRC audit trail if you are ever inspected

Need a VAT specialist? Find a verified accountant at compliancemarket.co.uk/accountants.