To get the summer started, the Chancellor announced the Great British Summer Saving Scheme just as the warmer weather began.
In a break from previous economic announcements that have left many businesses feeling overlooked, the Great British Summer Saving Scheme is being framed as a way of increasing footfall and getting the economy moving.
However, not every business is set to benefit, so it is worth understanding what the impact of the Great British Summer Saving Scheme will be for you.
What will the Great British Summer Saving Scheme change?
The Great British Summer Saving Scheme is going to have a number of different effects, but the reduction in VAT for some services has caught the most attention.
This is unsurprising given that VAT is both complex and broadly unchanging, so even temporary tweaks are enough to spark interest.
Unfortunately, only businesses with services aimed specifically at children stand to benefit from the measure.
Qualifying services will see a reduction in VAT from the 20 per cent standard rate to the five per cent, meaning that customers will be paying less thus more inclined to spend.
Affected services include:
- Children's menu meals in restaurants
- Family/admission tickets to cinemas
- Theatres
- Amusement parks
- Zoos
- Museums
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
Rather than being a long-term easement, the reduced rate of VAT will apply from 25 June until 1 September 2026.
If you have any advanced bookings that fall within this time frame, you must now refund the additional VAT back to the customer.
In turn, you can reclaim the discrepancy in your own VAT return when the time comes to submit it.
Alongside the changes to VAT, the Great British Summer Saving Scheme aims to alleviate some of the pressure faced by those who rely on their vehicles.
Car and van drivers who use their vehicles for work will benefit from a 10p per mile increase in tax-free mileage rates, which is backdated to 6 April 2026.
This will see an increase from the current rate of 45p per mile to 55p per mile for the first 10,000 business miles in the tax year and 25p for mileage over 10,000 miles.
If you use your motorcycle for work purposes, you are unfortunately not impacted by the increase.
HGV drivers are now facing a 12-month road tax holiday, which may see them save up to £912.
Does my business benefit from the Great British Summer Saving Scheme?
There is a chance that the overall positive economic impact aimed for with the Great British Summer Saving Scheme may help businesses that are not directly targeted, as a rising tide lifts all boats.
Measures that lower the financial pressure on transport may help to bring supply costs down if deliveries can be made more affordable.
The Great British Summer Saving Scheme is directly working to draw in parents with children, so adjacent businesses could also find the increased footfall beneficial.
However, those businesses that are entirely separate from children, such as many pubs and clubs, are unlikely to feel much relief over the summer.
This may come as a heavy blow at a time when many such businesses are struggling with growing insolvency rates.
Whether your business is set to benefit from the Great British Summer Saving Scheme or not, we can help you prepare for the summer.
Where the changes to VAT threaten compliance, we can review your obligations and ensure you have addressed the sudden change.
If your bills are going to be eased by more footfall or if you are dreading a diminished summer, our expert can advise you with financial forecasts designed to cover a range of eventualities.
For expert support in taking some of the summer stress away from your business, speak to our team.