Is there VAT on takeaway food?

You might be wondering which products should you charge VAT on and whether to do it at standard rates or zero. Here is what the UK government has to say about it.

VAT rules and the change of momentum

The announcement of the budget 2021 which previously reduced the rates applied to the tourism and hospitality sector, ended in March 2022. From April 1st 2022 onwards the VAT charges are applicable at standard rates.

In this article, we will explore all you need to know about VAT on takeaways and get up to date with the latest rules and regulations. This applies to everyone who prepares and supplies drinks and food that are ready for consumption.

VAT for dummies

We understand that many food sellers out there are small and medium enterprise owners who more often than not have no way of determining the result of complicated legal jargon and formalities. Let us break it down for you in as simple terms as possible.

The Basics of VAT

● A business that prepares drinks and food that is made for straightaway consumption may pay either 0% (zero rate) or 20% (standard rate) for their food. Given that the business is VAT-registered. 
● Whether served on the location or as takeaway, hot food is subjected to VAT. 
● Food like fish, burgers, toasted sandwiches, Chinese/Indian/Italian takeaways and hot beverages will all incur the VAT.

Difference between Zero-rated and Standard-rate VAT

All food that is moist and hot along with most drinks is subjected to VAT at 20%, although some cold takeaways could be zero-rated for VAT. This will include sandwiches, cakes, cooked pasties and other products that are not advertised as hot and have not been kept warm after they have been cooked.

Zero-rated VAT food items

● Cold food purchased for takeaway.
● Condiments and Seasonings. 
● Ingredients and retail products. (Eg: Coffee beans, tea bags etc.)

Standard rate (20%) VAT Food items

● Any food or drink that is ready to eat and supplied for off-premises consumption. 
● Any food that is applicable for in-house consumption. 
● Any non-alcoholic beverage for consumption on the premises
● Hot food with cold ingredients (takeaway or eat-in). For example- Meat sandwiches, hot dogs, burgers etc.

“Heat’ is an important factor for considering VAT. Other items that are exempt from this category but still come under VAT are:

● Confectionary ( Biscuits, cakes, partly covered in chocolate, not covered at all.)
● Snacks, home and wine brewing products. 
● Medicinal teas
● Energy drinks. 
● Squashes and food cordials.

Still didn’t get the hang of it? Here’s a test

These five tests were created by the government so that you can check if the standard rates are applied to the takeaways. If your food has been:

● Advertised in a manner that suggests it is served hot.
● Kept hot after it has been heated. 
● Was heated in order to consume. 
● Given to a customer in packaging that retains heat (doesn’t matter if the packaging was designed for that purpose or in any packaging that is specifically made to keep the food hot.)
● Heated to order.

Conclusion

This information was taken from VAT Notice 709/1 - HRMR internal manual. You can visit for a deep-dive search and see the exact guidelines to satiate your curiosity. If you are an owner of an F&B business and thinking of diversifying your services to takeaways, consider checking out Favouritetable's Online Takeaway Ordering System.

Photo by Norma Mortenson: https://www.pexels.com/photo/a-man-holding-takeaway-cardboards-4393660/