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VAT position - milk drink/catering/alchohol

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I have been approached with this question:

A local catering firm will supply some of the drinks. The centrepiece of the drinks will be large jugs of “summer shake” which will be a simple milk drink flavoured with fresh strawberries and a little sugar.

The catering firm has confirmed it will turn a blind eye if Natalie arranges for her father to discreetly add half a bottle of alcoholic strawberry liqueur to most of the jugs, carefully labelling those left alone as “suitable for children”.

What is the VAT position?

Would I be correct in saying that even though a milk drink is a zero-rated product, because it is supplied by a catering firm, it would be subject to VAT of 20%. Therefore, the alcoholic aspect is irrelevant as it would be standard rated anyway?

Please let me know if this is on the right lines or if there is anything else important to add to this

Replies (10)

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RLI
By lionofludesch
19th Mar 2021 23:31

Here's the bigger question.

Have you got a licence to sell alcohol ?

The second is Who's Natalie ?

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Replying to lionofludesch:
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By Bella_123
20th Mar 2021 09:09

Its a hypothetical exam question so I am unable to tell you those answers!

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Replying to Bella_123:
RLI
By lionofludesch
20th Mar 2021 09:30

Ah - you want us to do your homework for you.

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Replying to lionofludesch:
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By Bella_123
20th Mar 2021 11:22

Rude - if you don't know how to answer the question then don't bother replying on my post :)

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Replying to Bella_123:
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By Hugo Fair
20th Mar 2021 11:27

We have a snowflake in the net - be gentle, they're very fragile.

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Replying to Bella_123:
RLI
By lionofludesch
20th Mar 2021 11:35

Quote:

Rude - if you don't know how to answer the question then don't bother replying on my post :)

I'm not helping you by doing your homework.

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Replying to Bella_123:
Stepurhan
By stepurhan
21st Mar 2021 11:38

Quote:

Rude - if you don't know how to answer the question then don't bother replying on my post :)

Rude is expecting others to do your homework for you.

Rude is telling people on a free forum how they should respond.

Rude as a first resort is not generally a good quality for accountants. Unless you work in industry there is a lot of interaction with other people involved.

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By pauld
20th Mar 2021 08:30

I would advise Natalie not to use strawberry liquer as its too sweet. Gin or vodka woukd be my choice.

With regard to the VAT position, yes I think a VAT would be better as it will hold more booze than large jugs.

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avatar
By Hugo Fair
20th Mar 2021 12:17

"VAT position - milk drink/catering/alchohol"

Quote:

I have been approached with this question:

A local catering firm will supply some of the drinks. The centrepiece of the drinks will be large jugs of “summer shake” which will be a simple milk drink flavoured with fresh strawberries and a little sugar.

The catering firm has confirmed it will turn a blind eye if Natalie arranges for her father to discreetly add half a bottle of alcoholic strawberry liqueur to most of the jugs, carefully labelling those left alone as “suitable for children”.

What is the VAT position?

Would I be correct in saying that even though a milk drink is a zero-rated product, because it is supplied by a catering firm, it would be subject to VAT of 20%. Therefore, the alcoholic aspect is irrelevant as it would be standard rated anyway?

Please let me know if this is on the right lines or if there is anything else important to add to this

As posted by Anon (before responding as Bella_123)

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Tallula Brogan
By Tallula Brogan
22nd Mar 2021 09:27

Hi everyone, the moderating team have decided to close any further comments on this post. Thank you all for your input.

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