Rachel Reeves has rolled out a package of consumer-facing tax cuts in a bid to put more cash in family pockets and breathe life back into Britain’s battered high streets, with the centrepiece a temporary VAT reduction on summer attractions designed to keep tills ringing through the holidays.
In a statement that drew rare applause from the hospitality lobby, the Chancellor confirmed that VAT on a swathe of family activities will fall from 20 per cent to 5 per cent under a new “Great British Summer Saving Scheme”. The reduced rate will apply to fairs, zoos, museums, cinemas and children’s meals in restaurants, running from the start of the Scottish school holidays on 25 July through to early September.
Reeves also ruled out the long-trailed rise in fuel duty, suspended tariffs on more than 100 supermarket food lines and lifted the tax-free mileage allowance by 10p per mile, backdated to April 2026. Free local bus travel for children aged five to 15 will operate throughout August in England, in what the Treasury framed as a co-ordinated push to ease pressure on households during the school break. Full eligibility criteria for the scheme have been published by the Treasury.
The measures land at a critical moment for the country’s small-business community, particularly the hospitality and leisure operators who have spent the past three years absorbing rising wage bills, energy costs and business rates. As Business Matters has reported, trade bodies have warned of a “tidal wave” of closures unless ministers act, with three pubs and restaurants shutting their doors every day so far this year.
A lifeline for the high street
Michelle Ovens CBE, chief executive and founder of Small Business Britain, welcomed the move as a timely intervention before the all-important summer trading quarter. “It’s encouraging to see the Chancellor’s commitment to a summer of savings with the VAT cut on children’s meals,” she said. “Providing an important boost for small businesses during the summer period, helping to drive footfall and ease pressure on margins at a crucial time of year. As many businesses prepare to enter the most important trading quarter of the year, measures that support both families and local high streets are incredibly welcome.”
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