Great British summer savings
On 21 May 2026, the Chancellor, Rachel Reeves MP, announced 'Great British Summer Savings', a package of measures aimed at cutting costs for families, particularly those with children.
The following two measures are of particular importance to businesses:
TAX-FREE MILEAGE RATES
A 10p per mile increase in tax-free mileage rates will apply in the 2026/27 tax year, backdated to April 2026. The increase relates to the amount per business mile driven that attracts tax relief and affects both employees and the self-employed. HMRC's mileage rates are as follows:
- 55p per mile for the first 10,000 business miles
- 25p per mile for business mileage over 10,000
- 24p per mile for motorcycles
- 20p per mile for bicycles
- 5p per passenger mile remains unchanged
Note that only the rate for cars and vans for the first 10,000 miles has increased; other rates are unchanged.
TEMPORARY REDUCED RATE OF VAT
From 25 June to 1 September 2026, the 5% reduced rate of VAT will apply to the following eligible activities:
- Children’s meals. To qualify for the reduced rating, the meal:
- Must be held out for sale as a meal for children.
- Must be a supply of catering by a restaurant, café or similar establishment and consumed on the premises.
- Must not be takeaway food.
- Can include drinks.
- Children’s cinema, theatre, show and concert admissions tickets.
- Admission to qualifying attractions that are suitable for children. This includes amusement parks, museums, heritage sites, zoos and soft play areas. The reduced rate applies to all admissions, regardless of the customer’s age.
If you’d like to know more about these measures please get in touch.
