Reeves cuts VAT on summer days out to 5% as part of cost of living support

VAT will be reduced from 20% to 5% during school holidays for tickets to attractions and children’s meals, including zoos, museums, theme parks, softplay venues, and children’s theatre. Fuel duty increases due in September and December will be postponed. Import tariffs on some foods will be suspended, with an expectation that supermarkets pass savings to customers. A proposed fixed-price scheme for staple foods in return for regulatory easing was rejected by retailers. The tax-free mileage rate for workers claiming driving costs will rise by 10p. Funding will come partly from changes to the foreign branch profits regime, targeting multinational oil firms that currently pay little or no corporation tax on UK energy trading profits.

"Rachel Reeves will cut VAT to 5% on summer attractions such as theme parks and softplay centres during the school holidays, as she aims to ease the impact of the war in Iran on cash-strapped households. The chancellor told MPs on Thursday she would also raise more tax from global oil firms operating in the UK, to help meet the costs of her plans."

"As well as cutting VAT from 20% to 5% during the summer on tickets for attractions and children's meals, Reeves confirmed she had postponed the fuel duty increases that were due to take effect in September and December. The chancellor also confirmed she would suspend import tariffs on some foods, saying: I expect supermarkets to pass these savings on in full to their customers."

"A more ambitious scheme that would have seen supermarkets commit to fixed prices for staple foods in exchange for the government easing regulatory burdens was rejected by retailers. Reeves said she would raise by 10p the tax-free mileage rate for workers claiming back the costs of driving, in a move she said would benefit, those who need to drive for work, from care workers to plumbers."

"The costs will be partly met by changes to the foreign branch profits regime, which determines how multinational oil firms pay tax on their UK operations. We must ensure that those who benefit from increased prices and volatility pay their fair share, Reeves said, suggesting the shift would raise several hundred million pounds. Currently, some oil and gas groups that operate overseas through foreign branches have structured their tax affairs in a way which ensures they pay little or no corporation tax on their UK energy trading profits. Today we are putting an end to that practice."

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