From today the sandwich chain will cut prices on hot drinks, while reductions on hot food and food eaten on the premises will come into effect from Friday.
Pret said the price cuts would not apply to cold takeaway food such as sandwiches and salads as these items are already zero-rated for VAT purposes.
As part of a package of support for the hospitality and tourism industries, Rishi Sunak has ordered a temporary VAT cut from 20pc to 5pc until January 12 next year. The measures could save households an average of £160 a year, the Treasury estimates, but firms are not required to pass on the saving to customers.
Wetherspoon revealed this week it would reflect the VAT reduction across hot drinks and food as well as the price of a pint of real ale, despite alcohol being exempt from the new reduced rate.
Pret's move to pass VAT savings to customers comes just a week after it revealed plans to axe up to 1,000 jobs and permanently shut 30 shops, leading to the immediate loss of 330 roles. The firm has suffered significant losses in the coronavirus crisis with sales down by 74pc.
As a result of the rate reduction, the price of an eat-in tuna mayo baguette at Pret will cost £3.15 instead of £3.60, with a takeaway ham and cheese croissant reduced from £2.40 to £2.10. A takeaway latte will cost £2.40, compared with £2.75 before the VAT cut.
Pret will also participate in the Treasury’s voucher scheme. The initiative gives diners eating in a 50pc discount on the price of their meal up to a maximum of £10 from Monday to Wednesday during August.
Customers eating in Pret’s outlets are being encouraged to provide their contact details as part of the Government's track and trace programme by scanning a QR code when they are seated at their table.
A Pret spokesman said: “We will be passing on the savings of the temporary VAT reduction to our customers.
“From today, you’ll be able to enjoy your takeaway coffee for a little bit less and from Friday this week, you’ll be able to enjoy lower prices while eating in at your local Pret.”