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Introduction

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Most food products are zero rated but food supplied in the course of catering is normally Standard Rated. ​​

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Catering - Standard Rated​​

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• Food and drink served in a Restaurant 

• Supplies of food and drink at events such as conferences, parties, weddings and similar gatherings

• Cooked and ready to eat meals delivered

• Supply of cooking at a customers home for parties, post wedding meals etc

• Supply of catering under a catering contract

• Packed Lunches supplied for trips or other events

• Meals that form part of a package for hotel or bed and breakfast accommodation

• Service charges added to bills in restaurants

• Supplies of food, confectionery, drinks from vending machines in a restaurant

• Supplies of food and drink on a train, coach, plane, ship for journeys within the UK

• Supplies of food and drink to staff and visitors at clinics, hospitals and other care facilities

• Hot takeaway food that has been heated to enable consumption such as fish and chips, Chinese takeaways, Indian takeaways, kebabs, Pizzas, pies, rolls, sausage rolls, pasties, hamburgers, hot dogs, baked potatoes with hot or cold filling, soup, tea, coffee, hot chocolate and other hot drinks.

• Hot takeaway food that's been heated to order such as toasted bread, sandwiches, panini, teacakes

• Hot takeaway food kept hot after cooking such as freshly baked croissants, pretzels, patties, pasties, hamburgers, Kebabs, hot dogs etc

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Catering - Zero Rated

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• Supply of food that customers have to prepare for themselves

• Sandwiches and other food and drink (that is normally zero rated) taken to buildings for sale where the seller has no contract of supply with the firms. 

• Food and drink provided on trains, planes and ships where the destination is outside the UK 

• Cold takeaway (consumed off premises) food (not crisp, confectionery etc that is ordinarily standard rated

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Catering - Exempt

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• Supply of food and drinks by an educational institution in the canteen to it students 

• Supply of food and drinks in a school tuck shop

• Supply of food and drinks by a hospital, clinic, care home to its patients

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Catering - Outside the Scope of VAT

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• Tips in restaurants

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Who Must Account to HMRC For Output VAT Charged

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• The Owner of the catering facilities must account for VAT on sales of food and drink in its restaurants and on supplies of hot food 

• The catering contractor operating on the owners premises as principal should account for VAT on any food and drink sold in the catering facility and also any fee invoices issued to the owner of the facility and on any subsidies provided. 

• The owner of a catering facility where they have an agent that operates the canteen or restaurant on their behalf should account for VAT on food and drinks and any hot takeaway food sold within its facility.  Under this arrangement a supplier can either invoice the principal directly for goods supplied to the agent for sale in the canteen allowing them to recover the VAT or issue the invoice to the agent who can then recharge these on to the principal with VAT and account for it on their return.   

• Contractors who sell goods to both the catering establishment owner and also supply goods in the restaurant. In this case standard rated VAT will be payable by the agent on food and drink sold to the owner and on the fees charged by the agent for running the canteen.   

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-Contains public sector information licensed under the Open Government Licence v3.0.