Tax Planning
Summer VAT Relief & Mileage Rate Rise: What Businesses & Individuals Should Do
The UK’s summer 2026 tax changes offer VAT reliefs on days-out and a mileage rate increase—critical for businesses and self-employed travellers alike.
By NomadicTax Research Team • 5-8 min read • June 21, 2026
## Key Summer Tax Reliefs at a Glance
From **25 June to 1 September 2026**, the UK government is introducing the **Great British Summer Savings scheme**, which lowers VAT from **20% to 5%** on eligible children’s meals, entertainment (cinemas, theatres), and attractions. ([gov.uk](https://www.gov.uk/government/news/great-british-summer-savings-vat-slashed-to-save-families-money-on-days-out?utm_source=openai))
Simultaneously, the **tax-free mileage rate** for business travel by own-vehicle is increasing by **10p per mile** for the 2026-27 tax year, backdated to April. This change will save workers doing 6,000 business miles about **£120 over the year**. ([gov.uk](https://www.gov.uk/government/news/great-british-summer-savings-vat-slashed-to-save-families-money-on-days-out?utm_source=openai))
## Who and what are affected
- **Individuals** planning family outings to restaurants, cinemas or attractions—eligible items will cost about **5% VAT** instead of 20%. If your meal is marketed as a children’s meal or a properly priced entry ticket in the scheme’s span, you should benefit. ([gov.uk](https://www.gov.uk/government/news/great-british-summer-savings-vat-slashed-to-save-families-money-on-days-out?utm_source=openai))
- **Self-employed or employee drivers** using their own vehicle for business use will get higher tax-free allowances for mileage. Combined with lower fuel duty and other reliefs, this boosts take-home pay.
- **Businesses in tourism, leisure and hospitality sectors**—chargeable tickets & menus may need to change pricing; they must clearly mark which items qualify under relief guidelines.
## Things to do right now
1. **Businesses:** update pricing or point-of-sale systems to reflect VAT at 5% for qualifying offerings during the relief period. Ensure that children’s meals meet criteria (served from children’s menu, marketed/presented/priced accordingly) to qualify. ([gov.uk](https://www.gov.uk/government/news/great-british-summer-savings-vat-slashed-to-save-families-money-on-days-out?utm_source=openai))
2. **Claiming mileage:** track business miles meticulously. With the rate up 10p, adjust employer expense policies or accounting for self-employed. The new rate applies **from April**—so even early miles may be claimed under higher rate. ([gov.uk](https://www.gov.uk/government/news/great-british-summer-savings-vat-slashed-to-save-families-money-on-days-out?utm_source=openai))
3. **Budget for changes:** for businesses in entertainment/leisure, expect higher footfall; plan staff, inventory and cash flow accordingly. For individuals, summer relief may reduce spending—good time to budget family-fun expenses.
## Longer-term implications & policy context
- These reliefs are **temporary**, covering summer 2026 only. VAT returns and record keeping must still cover these special rates separately.
- The scheme is partially funded by tightening the **foreign branches exemption** for multinationals, reducing opportunities to shift profits or offset UK tax bills using branch structures abroad. ([gov.uk](https://www.gov.uk/government/news/great-british-summer-savings-vat-slashed-to-save-families-money-on-days-out?utm_source=openai))
- Fuel duty cuts and reliefs to hauliers (road tax holiday) continue alongside, supporting sectors dependent on transport. ([gov.uk](https://www.gov.uk/government/news/chancellor-protects-drivers-and-businesses-from-rising-fuel-costs?utm_source=openai))
## Examples to show the benefit
- A family takes two children to the cinema in July and spends £50 on tickets. Normal VAT: £8.33; reduced: **£2.08** saved per transaction.
- A self-employed consultant drives 6,000 business miles in 2026-27 at £0.45/mile (existing): earns £2,700. With a 10p increase to £0.55, they’ll claim **£3,300**—adding **£600 extra tax-free income**.
## Bottom line
With the Summer Savings VAT relief and mileage rate boost, households and eligible businesses have immediate wins. Update your systems, capture accurate records, and ride the wave—but remember: most changes are temporary, so plan beyond September 2026.