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VAT registration - hot take away food

Help please from VAT wizards!

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Potential new client, hot take away food. Been operating a few years. Not registered for VAT.

I don't want to be over-thinking this but I have concerns around VAT.

A lot of sales come via an online advertiser. Customer contacts the advertiser, orders the food, pays the advertiser (say £20), collects the food from the take away. The advertiser pays the take away (say £17). I have seen the account opening document signed by the take away, but it is not clear to me whether the advertiser is acting as an 'agent' of the take away when receiving the £20.

Q1. For VAT threshold calculation, is the turnover £20 or £17?

Q2. Assuming VAT registration is required, is the likelihood that ALL sales will be standard rated?

Q3. Costs are chiefly wages & food. The business owner owns the property (so no rent). I believe the flat rate would be 12.5% of (VAT inclusive) taxable turnover. Is that likely to be a good deal for the client?

Thanks in advance for any responses!


Replies (2)

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31st Mar 2019 23:06

Q1 The ageements between retailers and online advertisers that I have seen all had the advertiser as agent, so £20 unless what you have is different.

Q2 This obviously depends on what is being sold - for example are all the supplies hot food?

Q3 The flat rates are designed to give the same answer as the standard method, you'll have do do your own calculations to get an answer relevant to your client.

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By legerman
01st Apr 2019 09:03

The sale will be £20. All sales standard rated except cold food (dips, side salad) etc. Cold drinks are standard rated

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