UK VAT slashed to 5% on summer attractions in cost-of-living plan

(Alliance News) - Rachel Reeves has announced a temporary cut in the rate of VAT on attractions such as theme parks, zoos and museums from 20% to 5% over the summer holidays.

The UK chancellor set out the measure as part of a package aimed at easing the impact on the cost of living from the Iran war.

She told the Commons in a statement on Thursday: "This will apply to ticket prices for both adults and children, covering attractions such as fairs, theme parks, zoos and museums.

"It will include children's tickets for cinemas, concerts, soft play, and the theatre, and it will cut the cost of children's meals in restaurants and cafes from 20% VAT to 5% as well."

She said the changes will apply across England, Wales, Scotland and Northern Ireland from June 25 until September 1.

The government expects businesses to pass on VAT savings to customers.

Her "Great British Summer Savings" scheme, which the Treasury estimated would cost around GBP300 million, also includes free bus travel for children aged between five and 15 in England during the school holidays in August.

Other measures announced by Reeves include a 10p per mile increase in tax-free mileage rates backdated to April, a GBP350 million critical chemicals resilience fund and a GBP120 million fund to help the ceramics sector, and the cutting of import tariffs on more than 100 types of food products.

As expected, Reeves did not announce immediate help with energy bills driven up by Donald Trump's war in the Middle East.

The household energy price cap is predicted to rise by GBP209 a year from July after the closure of the Strait of Hormuz pushed up global oil and gas prices.

Reeves told MPs: "Because of the decision that I made at the budget last year to cut GBP150 from energy bills, we have lessened the impact of rising prices and current external forecasts suggest that the cap from July will be at a similar level to the cap in April last year.

"We stand ready to act if market conditions worsen significantly later this year and I have been leading cross-government contingency work on design of potential future targeted and temporary support for businesses."

The chancellor said she would pay for cost-of-living support by changing how oil and gas companies with overseas operations are taxed.

This would put an end to the practice of some oil and gas groups structuring their tax affairs "in a way which ensures they pay little or no corporation tax on their UK energy trading profits" and "raise hundreds of millions of pounds a year", Reeves said.

Final costings for all the measures will be detailed at the next budget following scoring from the Office for Budget Responsibility, according to the Treasury.

By Press Association Political Staff

Press Association: Finance

source: PA

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