PARLIAMENTARY WRITTEN QUESTION
(4 November 2025)

To ask the Chancellor of the Exchequer, if she will make it her policy to exempt small businesses from paying VAT on birthday parties in line with the arrangements that currently exist for local leisure centres.

Asked by:
Juliet Campbell (Labour)

VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. VAT is the UK’s third-largest tax, forecast to raise around £180 billion in 2025/26, helping to fund vital public services.

Tax breaks reduce the revenue available for those services and must represent value for money for the taxpayer. Exceptions to the standard rate have always been limited and balanced against affordability considerations.

There are no specific VAT reliefs for birthday parties. A local authority leisure centre may not charge VAT if the activity falls within existing VAT exemptions, such as those for sport or education, or where the activity is treated as part of the council’s non-business community functions. Activities such as soft play and bouncy castle parties are taxable at the 20 per cent standard rate.

Answered by:
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