Will the Great British Summer Saving Scheme help your business or leave you tackling more complex tax bills?

By Heather Bright, Partner 

The Great British Summer Saving Scheme has been revealed by the Government as a way of helping businesses get more revenue over the summer. 

While it does seem to be well-meaning, the strategy has not been without detractors and there are concerns that consumers and businesses may not find it fully beneficial.  

A large part of this concern centres around tax complications so it is worth understanding how the Great British Summer Saving Scheme may impact your business. 

What is the Great British Summer Saving Scheme? 

Designed to tackle the cost-of-living crisis and boost business, the Great British Summer Saving Scheme offers a range of small measures to help businesses. 

The headline change is the adjustment of the rate of VAT from the standard 20 per cent to the reduced rate of five per cent on selected services.  

Primarily aimed at making things cheaper for parents with children, the 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 

This means that smaller adult portions will be excluded from the scheme, even if their size is comparable to a standard children’s meal.  

Additional measures include free bus travel in August for children aged five to 15 in England to try and get young people moving around on their summer holidays.  

The changes to VAT are only in effect from 25 June until 1 September 2026 and the updated rules do apply to any pre-booked affected services.  

Other measures announced include a 10p per mile increase in tax-free mileage rates, which is backdated to 6 April 2026. 

These changes will mean that drivers of cars and vans 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.  

It is hoped this may offset the effect of rising fuel prices by easing the burden on those who have to drive for work. 

Additionally, a 12-month road tax holiday has been declared for HGVs, which could see the typical heavy lorry save as much as £912 over the course of a year.  

How is my business affected by the Great British Summer Saving Scheme? 

Whether you offer a service directly targeted by the Great British Summer Saving Scheme or not, the measures may still affect your business. 

The goal is to increase footfall in local communities so neighbouring businesses may benefit when the parents pop in to take a break from entertaining their children on a busy outing. 

For businesses directly targeted, there will be an extra layer of tax administration to manage.  

The spirit of the Great British Summer Saving Scheme is that the VAT cut will be passed onto customers and the Competition and Markets Authority has been granted new anti-profiteering powers under the broader package of measures. 

However, there are not specific measures in the legislation to insist that savings are passed along.  

This means that some may change their prices while others are likely to absorb the additional funds to soften the blow of rising operational costs.  

Either way, the changed rate of VAT will need to be accounted for during the next annual filing, at which point any excess can be reclaimed.  

There is a plethora of businesses that are not likely to feel the impact of the Great British Summer Saving Scheme at all. 

Those aimed entirely at adults, like some pubs and nightclubs, are struggling with costs but are not being given specific, comparable relief.  

Whatever the impact of the Great British Summer Saving Scheme is on your business, getting professional accounting support is vital for making the most of the summer. 

Our expert team can review your processes and ensure that your budgets are agile enough to accommodate rises and falls in traffic. 

We can also review your VAT obligations as well as any other taxes that need to be managed.  

Keep your cool with tax this summer. Speak to our team today.