The Great British Summer Savings scheme

What is the Great British Summer Savings scheme?

The Great British Summer Savings scheme was announced by Chancellor Rachel Reeves MP in May 2026 as part of the Government's plans to help ease the cost of living and support family spending during the summer holidays.

The package of measures is designed to make everyday activities and days out more affordable for families while also providing a boost to businesses in sectors such as hospitality, leisure, tourism and retail that typically see increased demand during the summer months.

Running from 25th June to 1st September 2026, the scheme includes temporary VAT reductions on certain family activities and changes to tax-free mileage rates. There are also additional support measures, including free bus travel for eligible children in England during August.

 

Lower VAT on family activities and days out as part of the Great British Summer Savings scheme

From 25th June to 1st September 2026, a temporary 5% reduced rate of VAT will apply to certain family-focused activities. The reduction covers:

• Children's meals served in restaurants, cafés and similar establishments for consumption on the premises. To qualify for the reduced rating, the meal:
  1. Must be held out for sale as a meal for children.
  2. Must be a supply of catering by a restaurant, café or similar establishment and consumed on the premises.
  3. Must not be takeaway food.
  4. Can include drinks.
• Children's and family tickets for cinemas, theatres, shows and concerts
• Admission to qualifying attractions such as theme parks, zoos, museums, heritage sites and soft play centres.

For many families, this could make summer activities more affordable at a time when household budgets remain under pressure.

For businesses in the hospitality, leisure and tourism sectors, the measures may help increase footfall during the summer holidays.

However, businesses that qualify for the temporary VAT reduction should ensure their accounting systems, pricing and VAT processes are updated correctly.

 

Increase in tax-free mileage rates under the Great British Summer Savings scheme

The Government has also increased the tax-free mileage rate for cars and vans for the first 10,000 business miles from 45p to 55p per mile for the 2026/27 tax year, backdated to April 2026.

The change applies to both employees and self-employed individuals.

For employees who use their own vehicles for work, the increase may provide additional tax relief where mileage expenses are claimed. For self-employed individuals and business owners, the higher rate could result in increased deductions for qualifying business travel.

The rates for additional mileage after 10,000 miles and for motorbikes and bicycles remain unchanged.

For businesses, HMRC’s mileage rates guidance has been updated as follows:

For the self-employed:

Vehicle	Flat rate per mile for 2026/27	Flat rate per mile before 6 April 2026
Cars and goods vehicles – first 10,000 miles	55p	45p
Cars and goods vehicles – after 10,000 miles	25p	25p
Motorbikes	24p	24p

For employees:

Vehicle	Flat rate per mile for 2026/27	Flat rate per mile before 6 April 2026
Cars and vans – first 10,000 miles	55p	45p
Cars and vans – after 10,000 miles	25p	25p
Motorbikes	24p	24p
Bicycles	20p	20p

 

The Great British Summer Savings scheme free bus travel for children

As part of the wider package of support, children aged 5 to 15 in England will be able to travel free on participating local bus services throughout August.

Although this measure does not directly affect business taxation, it forms part of the Government's wider efforts to help families with everyday costs during the school holidays.

 

What does the Great British Summer Savings scheme mean for you?

The Great British Summer Savings scheme is a reminder that government support measures can affect both personal finances and businesses in different ways.

Whether you are a business owner reviewing your VAT obligations, a self-employed individual claiming mileage expenses or a family looking to understand what support is available this summer, it is a good idea to understand how these temporary changes apply to you.

At LWA, we support businesses and individuals with tax planning, VAT advice, payroll and accounting services. If you would like to understand how the Great British Summer Savings scheme could affect you, please get in touch with our team and we’d be pleased to help.

Call us on 0161 905 1801 in our South Manchester office or 01925 830 830 for our Warrington branch, or you can email your query to mail@lwaltd.com with ‘Great British Summer Savings Scheme’ in the subject header.

In the meantime, visit costoflivinghelp.campaign.gov.uk/summer-savings for more information.