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Manfred Bog Case

Manfred Bog Case

 Does any of our VAT experts have any information regarding the Manfred Bog Case ruling made in Germany which relates to "food and meals which have been prepared for immediate consumption by boiling, grilling, roasting, baking or other means"

Apparently this ruling could cause all takeaway food to be zero rated in the UK! with the possibility of retrospective claims of 4 yrs back this could be massive!

Does anyone have any further information or even any successful cases in the UK regarding the zero rating of hot food as described above?

The argument was that this would be a supply of goods and not services as the service element of takeaway food is not predominant.

Hains Watts are already advertising this ruling on their website.


15th Mar 2011 00:12

Not a VAT Expert

Hi M,

As you know I am not a VAT expert (although some might be amazed at my attempts at times) and the relevant parts of the rulings given on the 10th March 2011 in the ECJ are as follows

Operative part

On those grounds, the Court (Third Chamber) hereby rules:

1. Articles 5 and 6 of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment, as amended by Council Directive 92/111/EEC of 14 December 1992, must be interpreted as meaning that:

– the supply of food or meals freshly prepared for immediate consumption from snack stalls or mobile snack bars or in cinema foyers is a supply of goods within the meaning of Article 5 if a qualitative examination of the entire transaction shows that the elements of supply of services preceding and accompanying the supply of the food are not predominant; (My italics of the relevant part that you might be looking for)

– except in cases in which a party catering service does no more than deliver standard meals without any additional elements of supply of services, or in which other special circumstances show that the supply of the food represents the predominant element of a transaction, the activities of a party catering service are supplies of services within the meaning of Article 6.

2. In cases of the supply of goods, the term ‘foodstuffs’ in category 1 of Annex H to the Sixth Directive 77/388, as amended by Directive 92/111, must be interpreted as also covering food and meals which have been prepared for immediate consumption by boiling, grilling, roasting, baking or other means.

You can find a link to the cases (four conjoined ones) at the following

Ok does that help you? No doubt this will be relevant for your clients where they have predominantly stalls or snack bars

Hope it helps

[email protected]


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15th Mar 2011 01:25

what about takeaway premises?

will this ruling only be relevant to mobile stands? or can we assume it just as relevant to takeaway hotfood shops such as the local burger bar or fish and chips shop?

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15th Mar 2011 10:08


I'm not a VAT expert either but isn't there something that says HMRC don't have to refund the VAT if it's not going to be refunded to the ultimate paying customer (unjust enrichment)? Clearly that isn't even a remote possibility for mobile food vans etc - so the customer would have ended up paying and the mobile food van owner would get to pocket the VAT refunded. Unless, of course, it can be shown that the mobile food van owner would have charged the same price with or without VAT (i.e. the trader effectively bore the VAT cost)?

I may be talking rubbish as I don't get much involved with VAT unless it relates to property but, if I am, no doubt someone will correct me (please)!


[email protected]


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15th Mar 2011 10:35

Another non-VAT expert

I agree with Cathy that unjust enrichment would apply.

From the Deloitte summary that I saw on this, the suggestion was that these articles of the 6th directive don't apply directly, and so the UK's implementation (not being inconsistent) in VATA 1994 continues to apply

Basically nothing's changed with respect to the UK position.  Again, I stand to be corrected by those that advise on VAT issues for a living.

EDIT:  Extract from Deloitte Weekly VAT News 14/03/11:

ECJ decision in German “takeaway food” cases
The ECJ has gone straight to judgment in 4 joined German cases about “takeaway” type food and catering. It decided that the addition of minimal additional services (essentially the provision of counters and similar places where customers might eat the food that they bought), did not mean that the suppliers were providing a “catering” type service. Accordingly, in three of the four cases, the taxpayer’s supplies qualified for lower rate VAT. The fourth case concerned a range of services, from delivered food up to a “full service” party catering offering including staff to serve food, cutlery and crockery etc., as well as the food. The court concluded that where the services predominated, the supply could not be viewed as goods (food) and hence it did not qualify for the lower rate. Whilst the decision is interesting for its analysis of the goods/services issue, the different structure of the UK law on hot takeaway food etc is likely to mean that the case has little relevance in the UK.

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15th Mar 2011 11:28

Sorry ....


...but since EU law has supremacy over UK law, isn’t HMRC forced to act upon the directives?If it didn’t then all someone had to do was make a claim and assuming HMRC refused it, they would then just move the case up until they get to the European Courts who will enforce the law and award has happened in many cases.

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15th Mar 2011 12:39

EU Directives

Don't just apply automatically and absolutely.  The 6th directive for example is descriptive rather than presciptive and only some (but not all) of the terms it describes must be mandatoryily adopted by the member states.

What is and what isn't eligible for member states to apply reduced rating to, for example, is ultimately left to the member states.  I presume that Germany has adopted the wording from the directive, which required interpretation, whereas the UK has stated what is eligible for zero-rating in its own terms.

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15th Mar 2011 14:22

The Big Boys

 Hains Watts and BDO have set up to fight for this cause and seem to think thatthey have a very strong argument.

I was and am still wary that this will fail in the UK, but I have been approached by BDO stating that they could represent our clients for such a claim and seem quite confident.

I am not a VAT expert either and really needed guidance as this seemed to attractive an opportunity to simply ignore and rule out.

We really need one of our VAT experts such as Neil Warren or Neil Owen to come forward and shed some light to us sole practitioner GP's.

If Accountingweb can shed some light on this many people I am sure would be extremely grateful.

Perhaps Rebecca has a view on this?

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16th Mar 2011 09:53

Waiting for specialise advice

Again not a VAT specialist but spotted this late last week and am waiting for views from a couple of those who are.

There seems to be two problems with making claims at present :

firstly unjust enrichment as mentioned by Cathy and Cirius ;

and secondly whether the relevant provisions of the Directive are Directly Applicable or Effective in member states, particularly as the reduced rate/zero rating is a derogation from the main provisions which member states may use (Cirius second point).

If the second point is valid I think the argument may need to be taken on the actual wording of the UK legislation where Group 1 of Schedule 8 excludes 'a supply in the course of catering' and defines catering in Note 1. 

The ECJ decision help change the interpretation of the supply in the course of catering but again not sure it would override the clear definition in UK legislation and case law interpreting this.

Again the boundaries of the ECJ decisions are not clear : would an actual delivery service change from goods to service; would a takeaway with seating which customers can use again change to a service. 

Waiting for first reactions from HMRC ?  Have a few clients who would benefit though.  Any thoughts on the making of protective claims to get the four years back as far as possible?

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16th Mar 2011 09:56

Manfred Bog - distinction between goods and services

The ECJ case makes a distinction between supplies of goods (6th Dir, art 5) and supplies of services (6th Dir, art 6). Looking at Annex H (now Annex III of the 2006 Dir), which lists items which may be applicable to the reduced rate, Item (1) refers to the sale of foodstuffs (goods), and Item (12a) to restaurant and catering services (services).

The decision in respect of supplies of goods is perhaps the key area for opportunity for UK taxpayers. A burger van selling hot food may fall to be treated as a supplier of goods, rather than services. UK Law adds in the factor of whether the food is heated so as to be enjoyed hot, which is totally absent from the ECJ decision. This factor, in UK Law, means that hot takeaway food is standard rated. So, a burger van proprietor may wish to pursue a claim, arguing that the temperature of the food when supplied is entirely irrelevant; the issue is simply that the predominant element is goods not services, and therefore bring his supplies within Item (1), which is reduced rated. (There remains the question of the UK zero rating, of course, which is provided by a specific derogation.)

(There is a significant case currently involving the Subway chain, and I don't think the ECJ case covers the Subway situation where the customer requests specific items of salad, etc to be incorporated into his Sub.)

The issue of catering supplies is, I think, unchanged. Where food is prepared to order, and is supplied for consumption on the premises, such as in a restaurant, then that remains standard rated.  Whether the UK Government should apply Item 12a, along with window cleaning (Item 10b) is a matter for wider discussion.

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16th Mar 2011 18:43

Analysis from Baker Tilly's George Bull

In his weekly bulletin, Baker Tilly Head of Tax George Bull commented that the Bog case may open the door for a challenge to HMRC’s treatment of hot take-away food as standard-rated and provide opportunities for claims.

His analysis notes that the appellants argued their supply is one of goods (and therefore subject to the reduced rate of VAT available in Germany), rather than a supply of standard-rated catering services as argued by the German tax authorities.

He continues: "The ECJ ruled that for the purposes of the reduced-rate available for ‘foodstuffs’ in the EU VAT legislation, the foodstuff can be hot and still qualify. So this would mean that hot take-away food should be subject to the same rate of VAT as cold food. There is therefore an argument that, for VAT purposes, the UK legislation should not treat hot take-away food as catering whereas cold take-away food is treated as a zero-rated supply of goods.

"HMRC may well seek to differentiate the UK provisions from the German ones on the basis that the UK provisions fall outside the EU legislation as the UK operates a zero-rate for food rather than the minimum 5% reduced rate - these arguments may well develop in the fullness of time. In the meantime however businesses that supply hot take-away food should consider making protective claims for overpaid VAT going back over the last four years."

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17th Mar 2011 15:05

Making a claim

How would we make a protective claim? Is a letter to HMRC sufficient?

Do we need all the figures before making the claim.

I have one client who de-registered for VAT 18months ago but would benefit from the ruling otherwise. Can we still make a claim for the period up to de-registration?

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18th Mar 2011 11:38

Again not an expert

I always understood that food that happened to be hot (such as pies in a bakery that have just been cooked) could be treated as zero rated, but where they were kept hot then that became part of the service and was standard rated. The supply of said pies was not for immediate consumption - even though many are immediately consumed.

It has to be looked at from the other perspective I guess - why should I pay VAT on a pie for later just because it happens to be hot (the same would apply to bread and ready roasted chickens in the supermarket I guess)

I guess the fact the bakers turn out lots of freshly baked pies at lunchtime is just an accident!!

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18th Mar 2011 12:10

Not sure a protective claim will be effective

I am not sure a protective claim will be effective, certainly for past transactions. As has been pointed out the principle of unjust enrichment would provide HMRC with a sustainable argument not to refund any output VAT which might turn out to have been paid in error.

It may be possible to 'claim' zero-rating from now on as a result of the EU decision, charge the same price, but not account for 1/6th of it as VAT, but this 1/6th should be kept in reserve just in case. As VAT is a self-assessment system, the taxpayer would simply declare no output VAT on their future VAT returns, leading to VAT refunds on a regular basis which would promt a visit from HMRC no doubt....

I am not convinced the ECJ will find the UK Law (VATA 1994, Schedule 8, Group 1, Note 3) in contravention of ECJ law. Zero-rating is a derogation (permission) from the EU to override the provisions of the EU VAT Directives and in any case, as some contributors have pointed out, is open to interpretation - that is why there are so many cases involving VAT.

One to watch I guess. Don't you love VAT? The cases are always interesting (especially the ones around food) and something we can all relate to as we all pay it.

Malcolm Greenbaum

Greenbaum Training & Consultancy Limited


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18th Mar 2011 12:50

If it were the case...

... that it is mandatory that the UK must adopt "foodstuffs" as defined in Annex H (Annex III of the recast directive) of the 6th directive, and as elaborated on in this case, then all foodstuffs would have to be zero-rated (or lower-rated).  That would include chocolate, crisps (including pringles), cakes (including jaffa cakes and teacakes).  Some of those have already have come up in cases!

The words used in the 6th directive are "Member states may apply one or two reduced rates...the reduced rates shall only apply to supplies in the categories in Annex III".

If it were meant that the UK had to include items in the Annex in their zero-rating then catering services (which also appear in the same Annex) would have to be included as well.  That was decided in the reverse in this case.

The UK is allowed (if it wants to) to have one or two reduced rates and has been permitted to keep its zero rate.  It is allowed (if it wants to) to apply those rates to items included in the Annex.  It can include as much or as little of those items as it wants to, but can't include anything that isn't listed.  Nothing's changed other than the definition of "foodstuffs" has been elaborated on.  It certainly doesn't render the UK's implementation incompatible with the 6th directive.

Finally, WTF have the Europeans got against good old-fashioned frying (shallow and deep varieties) and is char-grilling a form of grilling (within their definition) or barbecuing (which is as absent from their list as frying).

If your catering involves frying or barbecuing you haven't got a hope in hell.  Still, most "hot takeaway" establishments could probably argue that they don't, as a matter of fact, supply their products at anything even approaching an ambient temperature.  Wasn't that the basic nature of the argument in Deliverance?

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18th Mar 2011 15:08

I'm also not a VAT expert

... so unlike the other non-VAT-experts above, I won't comment:-)


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18th Mar 2011 17:05

so selling burgers at a farmers market is likely to remain standard rated?

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20th Mar 2011 13:21

Watch this space!

 I am sure that HMRC will have to release their opinion on this. Since both BDO and Hains Watt are advertising the service of making a claim for businesses we are bound to hear more abou this in the near future.


Although with the prospect of mass claims HMRC are bound to vigorously defend their stance, one thing is for sure any chance of any retrospective claims will be short lived so it may be a good idea to make the protective claims for clients sooner rather than later.


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21st Mar 2011 12:04

What happened to prices on 4 January ?

The potential issues of these cases are massive - and will need a lot of thought and analysis.

However, as an opening tip regarding protective claims for the last four years, find out how your takeaway food clients dealt with the VAT increase to 20% on 4 January. Did they absorb the VAT rise from 17.5% to 20% within their existing prices or did they wholly pass it on to customers with an increase? If the latter, this gives a clear opening to HMRC that any past rebate must be blocked anyway under 'unjust enrichment' rules, irrespective of other issues.

Neil Warren (VAT Consutlant and Speaker)


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21st Mar 2011 12:23


"However, as an opening tip regarding protective claims for the last four years, find out how your takeaway food clients dealt with the VAT increase to 20% on 4 January. Did they absorb the VAT rise from 17.5% to 20% within their existing prices or did they wholly pass it on to customers with an increase? If the latter, this gives a clear opening to HMRC that any past rebate must be blocked anyway under 'unjust enrichment' rules, irrespective of other issues.

Neil Warren (VAT Consutlant and Speaker)"

That's a very interesting point, thanks for that!

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23rd Mar 2011 16:24


... say we told a client to stop charging VAT on their takeaway food sales as we believed the case would later apply in the UK, and later HMRC said 'no chance' and the SR stood, I assume the client would at least incur interest on unpaid VAT, but would they have penalties or are they somehow protected from, I assume, deliberate misstatement penalties, by some rule (the 'well we hoped a case would occur in our favour' rule)?

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13th Apr 2011 13:40

Penalties on underpaid VAT

I have asked Customs the question about exactly this scenario. Presumably, I thought, if the Client decides (or is advised) not to charge VAT, on the basis that he expects a Court case to decide in his favour, would that not be a deliberate and unconcealed error, under the terms of the new penalty legislation. But, Customs assured me that a technical argument of this type would not trigger a penalty. (I have spoken to other advisers, who have been given different advice by Customs.)

However, there is nothing to that effect in the legislation. An error is an error, whatever the reason for it. The penalty is triggered. The level of the penalty depends on the circumstances.

If the taxpayer does not charge VAT, there has to be a risk that the Courts will side with Customs, leaving a significant assessment. I prefer the protective claim route, whereby the Client submits Returns following Customs' view, but sends in VAT 652 Voluntary Disclosures with a covering letter.

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