Rachel Reeves has announced a number of temporary summer measures aimed at helping families and workers with rising living costs.
Here are the key things small business owners, employees and families should know about:
☀️ VAT cut to 5% on summer activities
From 25 June to 1 September 2026, VAT will temporarily reduce from 20% to 5% on:
🎢 Theme parks
🦁 Zoos & wildlife parks
🎭 Children’s theatre tickets
🎬 Cinema tickets for children
🛝 Soft play centres
🍔 Children’s meals in restaurants
Important for cafés & restaurants
If you own a café, restaurant, pub or hospitality business offering children’s meals, please be aware this may create some temporary admin work for you.
You may need to:✔️ Update till systems and EPOS settings✔️ Check how children’s meals are coded for VAT✔️ Amend pricing or meal deals if neededMake sure the correct VAT rate is applied between 25 June and 1 September
We’re still waiting for the detailed guidance from HMRC, but it’s definitely something hospitality businesses should prepare for early to avoid VAT mistakes later.
Fuel duty increases delayed
The planned fuel duty increases due later this year have now been postponed.
That means petrol and diesel prices should avoid an additional increase for now — good news for commuters, delivery drivers and businesses already battling rising costs.
Mileage allowance increase
The tax-free mileage allowance for workers using their own vehicles for work is also increasing by 10p – Up to 55p from 45p for the first 10,000 miles only.
This is particularly important for:
✔️ Care workers
✔️ Tradespeople
✔️ Mobile staff
✔️ Business owners travelling between sites or clients
We’re still waiting for the full technical details and updated HMRC guidance, but this could mean higher tax-free reimbursements for business mileage going forward.
Import tariffs suspended on some foods
The government has also announced the temporary suspension of import tariffs on certain foods including chocolate and biscuits, with pressure on supermarkets to pass savings onto consumers.
Whilst none of this is life-changing on its own, it’s one of the first announcements in a while that includes a few practical measures aimed at helping both households and small businesses through rising costs.