VAT on 'Meal Deals' with different rates of supply

VAT on 'Meal Deals' with different rates of supply

Didn't find your answer?

We have recently taken on a client who sells takeaway food - some of which is standard rated, some of which is zero rated.

As part of their offers, they offer a meal deal - which basically consists of a main dish (standard rated), and any two additional dishes (can be either both standard rated, both zero rated, or one of each).

How do I calculate the output VAT on this?

Say the sale price is £11.00, and is made up of a standard rated main dish of £8.00, a standard rated 'side' of £3.00, and a zero rated 'side' of £2.50, is it enough to say this:

Main: 8.00 (VAT = 1.33)

Side 1: 3.00 (VAT = 0.50)

Side 2: 2.50 (VAT = 0.00)

Total: 13.50 (VAT = 1.83) - therefore VAT rate = 13.55%

Sale price of deal = 11.00, therefore VAT = 1.31 (11.00 x 13.55/113.55)

Or is there a different calculation I need to make?

Replies (2)

Please login or register to join the discussion.

avatar
By Peter Kilvington
03rd Mar 2014 14:03

Depends

Without knowing the full details it is difficult to give a complete answer.  However I have two initial thoughts which go against each other.

Firstly you client is offering a discount and that can be applied against which ever meal he decides so you could argue that a £2.50 discount has been applied against the 20% VAT item within the deal.

Secondly your client is offering a single supply "meal deal" and that the whole "meal deal" is subject to VAT.

 

Thanks (0)
avatar
By spidersong
03rd Mar 2014 16:23

Or neither and....

you could read Section 6 of HMRCs notice on Business Promotion Schemes which covers Meal Deals...

( http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000091&propertyType=document#P131_14337  )

Hint: It's an apportionment you need and HMRC don't acept the argument that it's a variable discount against whichever item means you have a VAT liability. Boots tried that to tribunal or appeal level and lost (IIRC which I don't always do!)

Thanks (0)