Families are expected to get cheaper access to theme parks, zoos and museums as well as kids’ meals as a temporary VAT cut comes in to force on Thursday for the school summer holidays.
Ticket prices at various attractions are among the activities where VAT will be reduced from 20% to 5% in what the goverment said would help with the cost of living.
The cut begins on 25 June, in time for schools breaking up in Scotland at the end of this month, followed by Northern Ireland, England and Wales in July, until 1 September.
But families, charities and firms said the measure will do little to help squeezed budgets, with some doubting the tax saving would be passed on to customers.
Chancellor Rachel Reeves said the summer holidays could be quite expensive, and the purpose of the temporary cut to VAT on family-related activities was to “help people make those precious memories during the summer holidays, but not having to fork out too much for it”.
Alan, 42, from Brighton goes to theme parks with him family regularly but he does not expect much from the VAT cut.
“These kind of attractions are quite expensive in the first place,” he said, adding that the savings, if passed on, would be “negligible” and only benefit those who go to theme parks as a one-off.
He said the best option for his family was having a theme park pass, which they use to go to Legoland, Chessington World of Adventure and Sea Life centres.
Helen Miller, director of the Institute for Fiscal Studies think tank, previously said the measures would lead to some savings, but estimated they would equate to an “average saving of around £10 per UK household”.
Alan says that more useful measures would be if energy and fuel costs were addressed.
“How the government can say this is going to result in any household saving is a mystery,” he said.
Asked whether the savings would be meaningful, Reeves told the BBC the government was focused on helping families.
“Especially over the summer, things can be a bit more expensive. So we are targeting this directly at families,” she said, adding there would also be unlimited free bus travel for children in England in August.
The chancellor pointed to other measures the government has introduced including freezing prescription charges, freezing rail fares and providing energy bill relief as also helping households with cost of living pressures.
Image source, Getty Images
Rob Parkinson, chief executive of the Family Holiday Charity, said that the government, industry and voluntary sector needed to “work together to identify and implement an enduring solution” for families.
VAT will be reduced on children’s meals served in restaurants as well as kids’ and family tickets for cinemas, theatres, concerts, shows. and exhibitions.
Also included are adventure parks, nature reserves and wildlife parks. There will be free bus travel for children aged between five and 15 in England.
The government said the scheme will cost around £300m.
Businesses can choose whether or not to pass on the discount to customers.
Image source, Getty Images
Pub chains Wetherspoons and Greene King, as well as Nando’s will be among those who say they will pass on tax savings to customers in the form of cheaper meals.
But Laughton Ross, an accountant from London whose clients include local hospitality businesses, is concerned about the additional costs to firms of implementing the scheme.
“The changes only apply for a few weeks,” he told the BBC. “They will have to reprogramme till systems and accounting systems, which creates operational and financial risk, only to reverse all of this a few weeks later.
“Many smaller businesses don’t have in-house capability to handle the changes and the cost of support could be significant for them. This is in addition to the cost of re-printing menus, and so on,” he said.
He added that “the guidance published to date suggests the rules around how the scheme will operate are overly complex.”
Additional reporting by Peter Ruddick and Alex Emery.
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