VAT on hot food

14 April 2006 German food is a teeeeeny bit he...

Image via Wikipedia

At present the more you prepare food for consumption, the more likely the supply will be considered a standard rated supply for VAT purposes.

HMRC turned their nose up when an EU case recently came to a different conclusion. A German trader succeeded in having the supply of a hot sausage treated as a supply at a reduced rate rather than a catered supply which would have been subject to the standard rate in Germany.

HMRC continues to view food sold on a takeout basis as a standard rated supply. However a recent UK case has drawn a further distinction:
•    Food sold and delivered hot, to be consumed hot, was held to be a standard rated supply, for instance a curry.
•    Food sold and delivered hot as part of its preparation, but it is not necessary that they be consumed whilst hot, were considered to be a zero rated supply. For example naan breads, salads etc.

So affected traders could now consider that they are making a split supply, some standard rated, some zero rated.

Now may be a good time to check and make sure that you are not including VAT for the supply of takeaway goods that can now be treated as zero rated. These could also include:

•    Cold sandwiches
•    Cakes
•    Biscuits (without chocolate covering)
•    Milkshakes
•    Frozen meals
•    Yoghurt

At present the more you prepare food for consumption, the more likely the supply will be considered a standard rated supply for VAT purposes.

Enhanced by Zemanta

Comments are closed.