Costa, KFC, McDonald's, Nando's & more up to 12.5% off – who is and isn't passing on the recent VAT cut

On 15 Jul, the Government cut VAT to 5% for the hospitality sector including restaurants, cafes and pubs till 12 Jan 2021. This has led to many big chains such as KFC, McDonald's, Costa, and Nando's slashing prices – so we've canvassed 21 big eateries, coffee shops and pubs to see where you'll save, and if so, by how much.

VAT is a tax on businesses which is normally added to the price, so they don't have to pass the saving onto customers, it's completely up to each outlet – and of course, if you're not happy with any outlet that isn't, you've the choice to go elsewhere.

While most of the major chains we've contacted are reducing menu prices, not all are passing on the full VAT discount – which maths fans will have worked out is 12.5% off. Some aren't cutting prices at all, including Toby Carvery and Fridays, which are using the VAT saving to help towards operational costs instead, while others are still considering it. Even where outlets have reduced prices, it's not always as simple as getting 12.5% off.

The table below shows 21 big-name outlets and what discount they're giving, if any. Use the figures as a ready reckoner, but do check menu prices yourself as it's likely restaurants will round up the prices rather than charging odd amounts.

Outlet Will a discount be applied? When? Full discount info

Burger King
Yes, discounts vary Throughout August

Offering discounts via it's app alongside Eat Out to Help Out 50% off.

Caffé Nero
No N/A Using the VAT reduction to 'protect as many store team jobs as possible and keep doors open'.

Costa Coffee
Yes, 12.5% Already happening

Full 12.5% VAT reduction on all food & drink. Eg, flat white now £2.36 (was £2.70), bacon bap now £2.58 (was £2.95), Costa Express regular hot drink now £2.10 (was £2.40).


Operates a part-franchise model so only recommended franchisees pass on the saving. Prices may differ locally.

Yes, discount varies locally Already happening

Local deals which vary per location, eg, collection personal pizza now £3.69 (was £3.99), 'family football feast' deal now £22.99 (was £24.99) etc.


Operates a franchise model so prices may differ from what it's given us. Check online before heading out.

Frankie & Benny's
Yes Already happening Confirmed it's reduced menu prices. Won't tell us what or by how much.

Yes, 12.5% Already happening 

Full 12.5% VAT reduction on hot food & drinks. Excludes products that aren't kept heated.


Yes, about 7% Already happening Discounting selected items, incl £1 off all sharing buckets & 50p off popular meals, eg, 'boneless banquet' box meal, 'mighty bucket for one', 'Colonel’s meal for one' etc.

No N/A Using the VAT saving to help 'protect jobs which may have otherwise been lost'.

The Ivy
No N/A Confirmed it's not giving a VAT reduction off its menu.


Yes, 6%-29%
Already happening

Discounting selected items, eg, Sausage & Egg McMuffin now £2.19 (was £2.49), Happy Meal now £2.49 (was £2.99) & a medium Big Mac meal now £4.59 (was £4.99)


Operates a franchise model so local prices may differ. Check the McDonald's app for your local's prices.

Yes, 12.5% Already happening

Full 12.5% VAT reduction on all food & drink, excluding alcohol.

Pizza Hut
Yes, up to 12% Already happening Selected 'popular' restaurant & delivery items, eg, £24.99 meal deal now £22.

Pizza Express
Yes, various discounts  Tue 4 Aug  £1 off all listed Romana pizzas, Calabrese & Calzone. Piccolo Menu will be reduced to £6.95

Yes, 12.5% Already happening

Full 12.5% VAT reduction on all hot food and hot drinks.

Cold drinks are included when dining in but not on takeaway.

Yes, 45p off selected drinks Already happening

Discounted espresso-based beverages by 45p, no matter what size, eat-in & takeaway.


Operates a part-franchise model so local prices may differ.

Toby Carvery
No N/A Using VAT reduction to prevent 'the need for any imminent price increases to cover the higher costs of operating a Covid-secure business'.

No N/A Using VAT reduction 'to recover from forced closures and operate under new social distancing measures'.

Yes, 5% at some locations Already happening Its press office hasn't responded. Some restaurants are offering a 5% reduction on menu items so this may be the case across all branches but check beforehand.

Yes, 12.5% Already happening Full 12.5% VAT reduction on food & drink, excluding alcohol. Eg, a fish taco dish now £6.10 (was £6.95).

Yes Already happening

Discounting selected items, incl real ale, coffee, soft drinks, breakfasts, burgers & pizzas.


Eg, pint of Ruddles bitter now £1.29 (was £1.79), Lavazza coffee now £1.29 (was £1.45), burger & soft drink from £4.99 (was from £5.65).

Young's Pubs
Yes, 12.5% Already happening Full 12.5% VAT reduction on food, soft drinks & coffee. Excludes alcohol.
Full discount info is based on information given to us by the outlet's press office and could be subject to change

Will the recent VAT cut encourage you to go to restaurants, cafes or pubs more? Do you think all chains should be passing on the saving to customers? Let me know your thoughts in the comments below, or on Twitter @MSE_Deals.