Tag Archives: VAT-reduced-rate

Reduced VAT rate for children’s meals, tickets, and family attractions

By   26 May 2026
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HMRC has announced a temporary reduced VAT rate of 5% will apply to the supply of children’s meals, tickets, and family attractions from 25 June 2026 to 1 September 2026 – Revenue and Customs Brief 5 (2026).

The brief explains a temporary reduced rate of VAT of 5% that will apply 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

Children’s meals

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

Children’s theatre and cinema tickets

The reduced rate applies to children’s admission tickets to:

  • cinema screenings
  • theatrical performances, shows and concerts
  • exhibitions

A children’s ticket is one that is held out for sale only as a right of admission for a child, based on how it is marketed, priced and presented by the supplier.

Attractions

The reduced rate applies to charges made for a right of admission for any customers, regardless of age, to qualifying attractions that are suitable for families with children.

This includes admission to the following venues, unless that admission is already exempt from VAT (for example because it is supplied by a qualifying charity or other eligible body):

  • amusement parks and fairs, including water parks and theme parks (excluding pay-per-ride attractions)
  • circuses
  • adventure parks, including outdoor adventure centres
  • museums and similar cultural facilities, including planetariums, heritage sites, nature reserves and botanical gardens
  • zoos, aquariums, wildlife parks and farm visitor attractions
  • soft play centres, indoor bounce parks and indoor play facilities
  • observation attractions, including viewing platforms, towers and observation wheels

Only supplies of admission to these types of attractions fall within the scope of the relief.

This Brief will be relevant to businesses making consumer‑facing supplies to families with children during the school summer holidays. This includes, but is not limited to, the following types of organisations and their advisers:

  • restaurants, cafés and similar catering establishments
  • cinemas, theatres, exhibition and performance venues
  • operators of circuses, fairs, amusement parks, theme parks, adventure parks and water parks, zoos and other animal attractions, soft play centres, observation attractions and certain other family-focused attractions
  • museums and similar cultural attractions

 

VAT: Public EV charging update

By   18 May 2026
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Further to the Charge My Street Limited case, which we considered here HMRC has published Policy Paper Revenue and Customs Brief 4 (2026): VAT liability of supplies of electricity from public electric vehicle charge points.

This paper sets out the VAT treatment of supplies of electricity from public EV charging points.

HMRC’s position remains that charging electric vehicles at public charge points is standard rated for VAT. 

Supplies of fuel and power to a domestic premises are subject to the reduced rate of VAT at 5%. HMRC’s long-standing policy is that electric vehicle charge points located in public areas do not qualify as domestic premises and the standard rate of VAT applies to the supply of electricity at these locations.

The First-tier Tribunal found in favour of Charge My Street Limited. It concluded that Note 5(g) of Item 1 of Group 1 of Schedule 7A to the VAT Act 1994 covers supplies of electricity to an identified person at any identifiable premises, provided the total supplied does not exceed 1,000 kWh in a calendar month. The FTT clarified there is no additional requirement for the premises to be owned or controlled by the person receiving the supply, nor do the premises need to be buildings. This means locations such as public car parks may be included. The FTT decided that supplies of EV charging at public charging stations fell within the de minimis limit for supplies of electricity, and so were deemed to be for domestic use and, accordingly, subject to the reduced rate.

HMRC has applied for permission to appeal the First-tier Tribunal’s decision.

A VAT Did you know?

By   25 February 2026
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Energy saving: Insulation, solar panels, wind turbines, wood-fuelled boilers and air-source heat pumps are subject to a reduced rate of VAT at 5%, but the installation of secondary or double glazing is at the standard rate of 20%.

VAT Notice 708: Buildings and construction updated

By   1 July 2025
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This Notice explains how to establish the appropriate VAT rate on building work and materials for contractors, sub-contractors and developers.

The construction of a new building and work to an existing building is normally standard rated. However, there are exceptions to this, inter alia:

  • construction of new qualifying dwellings and communal residential buildings, and certain new buildings used by charities ― zero-rated
  • conversion for a housing association of a non-residential building into a qualifying dwelling or communal residential building ― zero-rated
  • alterations to suit the condition of people with disabilities ― zero-rated
  • first time gas and electricity connections ― zero-rated
  • conversion of a non-residential building into a qualifying dwelling or communal residential building ― reduced rate of VAT 5%
  • renovation or alteration of empty residential premises ― reduced rate of VAT 5%
  • installation of energy saving materials, grant funded heating system measures and qualifying security goods ― reduced rate of VAT 5%
  • installation of mobility aids for the elderly for use in domestic accommodation ― reduced rate of VAT 5%

(These are just some examples; other works may also qualify for zero or reduced rating)

Amendments

Paragraph 7 (re: the conversion of premises to a different residential use) on reduced rated work has been amended at para 7.6 as there was uncertainty over the previous drafting.

Paragraph 8.4 has been revised to more accurately reflect the rules on the installation of building materials which are reduce rated.

VAT – Fuel and power guidance updated

By   11 February 2025
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HMRC has updated its notice Updated its Notice 701/19: Fuel and power.

The Notice explains how suppliers and users should treat supplies of fuel and power for VAT purposes and it sets out how to treat a number of other supplies connected with fuel and power.

The update provides more detail of supplies for domestic use.

Supplies of fuel and power for domestic use are eligible for the reduced rate of 5%.

The provider must be certain that the supply is to a dwelling or certain types of residential accommodation. Examples of allowed residential accommodation are:

  • armed forces residential accommodation
  • caravans
  • children’s homes
  • homes providing care for the elderly or disabled, people with a past or present dependence on alcohol or drugs or people with a past or present mental disorder
  • houseboats
  • houses, flats or other dwellings
  • hospices
  • institutions that are the sole or main residence of at least 90% of their residents
  • monasteries, nunneries and similar religious communities
  • school and university residential accommodation for students or pupils
  • self catering holiday accommodation

The following buildings are not considered residential accommodation for the purposes of fuel and power:

  • hospitals
  • prisons or similar establishments
  • hotels, inns or similar establishments

Extension of VAT energy-saving materials relief

By   22 January 2024
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HMRC have published a new Policy Paper on the extension of energy-saving materials (ESMs).

Installations of ESMs in residential accommodation currently benefit from a temporary VAT zero rate until 31 March 2027, after which they revert to the reduced rate of VAT at 5%.

This measure extends the relief to installations of ESMs in buildings used solely for relevant charitable purposes, such as village halls or similar recreational facilities for a local community.

It also expands the scope of the relief to the following technologies:

  • electrical batteries that store electricity generated by certain ESMs and from the National Grid
  • water-source heat pumps
  • diverters that enable excess electricity from certain ESMs to be used within a building in which it is generated rather than exported to the grid

It also adds certain preparatory groundworks that are necessary for the installation of ground- and water-source heat pumps.

The changes apply from 1 February 2024

The policy objective is to incentivise the installation of ESMs across the UK to improve energy efficiency and reduce carbon emissions.

The measures are implemented by The Value Added Tax (Installation of Energy-Saving Materials) Order 2024.

VAT: Updated Fuel & Power Notice 701/19

By   16 May 2023
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HMRC has updated this Notice to reflect the new de minimis limits (para 6.1.1).

 

VAT: Recovering input tax on the charging of EVs

By   24 April 2023
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Following my last article on charging Electric Vehicles (EVs) I have been asked about the rules on recovering VAT incurred by a business on such costs.

The current rules are:

VAT incurred by businesses when charging EVs can be recovered on the business use of those vehicles, where they are charged at work or at public charging premises.

A business can also recover the VAT for charging EVs if it is a sole proprietor or a partner in a partnership business, and it charges the EV for business purposes at home.

A business must calculate how much of the cost of charging its EV is for business use and how much is for private use by keeping mileage records. The normal input tax rules then apply.

If an employee charges an EV (whether a company vehicle or not) at a public charging point, the supply of electricity is made to the company or employer. The business can recover the VAT on the cost of charging the electric vehicle, subject to the normal rules.

Again, the employer must keep detailed mileage records to calculate how much of the charging cost is used for business and private purposes.

However, where an employee charges an EV (whether a company vehicle or not) at home, the overall supply of electricity is made to the employee and not the employer. The employer is not entitled to recover the VAT on the cost of charging the electric vehicle.

NB: We understand that HMRC’s view on this may be soon be challenged.

Current developments

  • HMRC is currently reviewing the situation where an employee is reimbursed by the employer for the actual cost of electricity used in charging an electric vehicle for business purposes.
  • The Department is considering other simplification measures that may reduce administrative burdens in terms of accounting for VAT on private use.
  • The VAT rate applicable to public charging is 20%. We are aware that there could be a legal challenge to this and that the appropriate rate should be 5% (for all forms of EV charging). The reduced rate of VAT currently only applies to supplies of electricity to a person’s property which is less than 1,000 kilowatt-hours a month.

Hybrid cars are treated as either petrol or diesel cars for VAT purposes. The rules on input tax for petrol and diesel vehicles are here.

 

VAT: Fuel and Power Notice updated

By   4 October 2022
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HMRC Guidance: Fuel and power (VAT Notice 701/19)

This Notice has recently been updated. It now covers the VAT Reverse Charge measures for wholesale gas and electricity and construction services (Section 2) . There is more information about wholesale gas and electricity and using the VAT domestic Reverse Charge at section 3 of Notice 735: Domestic reverse charge procedure (VAT Notice 735).

Sections 4.1 and 4.3 now include more detail about hydrogen gas.

Brief overview

The reduced rate of VAT of 5% applies to supplies of fuel and power for qualifying use.

Qualifying use means:

  • fuel and power for domestic use
  • fuel and power for charity non-business use
  • fuel and power where the amount supplied does not exceed the small quantities, called the de minimis limits
  • fuel and power partly for qualifying use and partly for other purposes, where 60% or more of the supply is for qualifying use

Other supplies of fuel and power in the UK are standard rated.

New VAT rate for hospitality

By   13 August 2021
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A reminder that a new VAT rate of 12.5% comes into force on 1 October 2021.

This is the first time this rate has been used and affected businesses should ensure that they are prepared.

The government announced on 8 July 2020 that it intended to legislate to apply a temporary 5% reduced rate of VAT to certain supplies relating to certain hospitality, supplies.

The reduced rate was initially introduced to last for a temporary period between 15 July 2020 and 12 January 2021. This period was subsequently extended to 31 March 2021.

The government then announced at Budget 2021 that the temporary reduced rate will be extended for a further six-month period at 5% until 30 September 2021.

A new reduced rate of 12.5% will then be introduced which will end on 31 March 2022. The scope of the relief will remain unchanged.

From 1 April 2022 the usual 20% standard rate will apply, unless there are further government concessions.

The 12.5% applies to

  • hospitality: supplies in the course of catering including supplies of hot and cold food and drink to be consumed on the premises and supplies of hot takeaway food and drink to be consumed off the premises
  • accommodation: the provision of hotel and holiday accommodation, pitch fees for caravan parks and tents and related facilities
  • attractions: admission to attractions not covered by the cultural exemption.

The VAT Fractions

This is used to calculate the VAT element of a VAT inclusive figure.

5% = 1/21

12.5% = 1/9

20% = 1/6

Deposits

If a deposit is received, output tax will be calculated on the VAT rate in place at the time the deposit is received.

Other Issues

If a business supplies hospitality services and goods, but also makes sales not covered by the new rate, eg; alcohol, it must be able to identify the values at the different rates.

Does your accounting package have a defined 12.5% tax rate? It may be necessary to add this new rate to your software package.