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VAT on food

VAT on food

I know what the legislation says, but there seem to have been so many U-Turns and 'oh but not that's' I have lost track how we are interpreting it.

If I buy a sausage roll and it's hot, I pay VAT if it was the sellers intention I eat it hot.  So they can still say 'It's only hot because I needed to show I had cooked it' presumably?


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17th Jan 2013 20:44

Food - UK and EU legislation

The current issue is driven by a significant difference between UK and EU VAT Law. This has been highlighted by the European Court cases (Manfred Bog, etc), which you will have heard about. Based on this, and other arguments, the case has been made that supplies of food which is essentially pre-prepared, whether hot or cold should be considered a supply of goods, rather than of services. Hence the supply should be zero rated (UK Law) or reduced rated (EU Law). That is a simple (and I hope not misleading) summary.

Your ready-to-eat sausage roll may be zero rated not standard rated, if it is not truly a supply in the course of catering.

This one continues to simmer!

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18th Jan 2013 00:59

Equal treatment

Totally agree.  UK interpretation of the law, particularly the derogation, is that it matters not whether it is a supply of goods or services, if it is catering.

The other argument that is rumbling along is the same one that applied to the gaming machines, one of equal treatment for similar supplies. 

I had a radical approach to all of this.

Certainly, even I would agree with HMRC that this is an area with lots of anomalies!

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